[Federal Register Volume 85, Number 229 (Friday, November 27, 2020)]
[Proposed Rules]
[Pages 76390-76417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26312]
[[Page 76389]]
Vol. 85
Friday,
No. 229
November 27, 2020
Part VI
Small Business Administration
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13 CFR Part 121
Small Business Size Standards: Education Services; Health Care and
Social Assistance; Arts, Entertainment and Recreation; Accommodation
and Food Services; Other Services; Proposed Rule
Federal Register / Vol. 85 , No. 229 / Friday, November 27, 2020 /
Proposed Rules
[[Page 76390]]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 121
RIN 3245-AG88
Small Business Size Standards: Education Services; Health Care
and Social Assistance; Arts, Entertainment and Recreation;
Accommodation and Food Services; Other Services
AGENCY: U.S. Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: The U.S. Small Business Administration (SBA) proposes to
increase its receipts-based small business size definitions (commonly
referred to as ``size standards'') for North American Industry
Classification System (NAICS) Sectors related to Education Services;
Health Care and Social Assistance; Arts, Entertainment and Recreation;
Accommodation and Food Services; and Other Services. SBA proposes to
increase size standards for 70 industries in those sectors, including
14 industries in NAICS Sector 61 (Education Services), 18 industries in
Sector 62 (Health Care and Social Assistance), 11 industries in Sector
71 (Arts, Entertainment and Recreation), 4 industries in Sector 72
(Accommodation and Food Services), and 23 industries in Sector 81
(Other Services). SBA's proposed revisions rely on its recently revised
``Size Standards Methodology'' (Methodology). SBA seeks comments on its
proposed changes to size standards in the above sectors, and the data
sources it evaluated to develop the proposed size standards.
DATES: SBA must receive comments to this proposed rule on or before
January 26, 2021.
ADDRESSES: Identify your comments by RIN 3245-AG88 and submit them by
one of the following methods: (1) Federal eRulemaking Portal:
www.regulations.gov; follow the instructions for submitting comments;
or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Office
of Size Standards, 409 Third Street SW, Mail Code 6530, Washington, DC
20416.
SBA will post all comments to this proposed rule on
www.regulations.gov. If you wish to submit confidential business
information (CBI) as defined in the User Notice at www.regulations.gov,
you must submit such information to U.S. Small Business Administration,
Khem R. Sharma, Ph.D., Chief, Office of Size Standards, 409 Third
Street SW, Mail Code 6530, Washington, DC 20416, or send an email to
[email protected]. Highlight the information that you consider to
be CBI and explain why you believe SBA should hold this information as
confidential. SBA will review your information and determine whether it
will make the information public.
FOR FURTHER INFORMATION CONTACT: Jorge Laboy-Bruno, Ph.D., Economist,
Office of Size Standards, (202) 205-6618 or [email protected].
SUPPLEMENTARY INFORMATION:
Discussion of Size Standards
To determine eligibility for Federal small business assistance, SBA
establishes small business size definitions (usually referred to as
``size standards'') for private sector industries in the United States.
SBA uses 2 primary measures of business size for size standards
purposes: Average annual receipts and average number of employees. SBA
uses financial assets for certain financial industries and refining
capacity, in addition to employees, for the petroleum refining industry
to measure business size. In addition, SBA's Small Business Investment
Company (SBIC), Certified Development Company (504), and 7(a) Loan
Programs use either the industry-based size standards or tangible net
worth and net income-based alternative size standards to determine
eligibility for those programs.
In September 2010, Congress passed the Jobs Act (Pub. L. 111-240,
124 Stat. 2504, September 27, 2010) requiring SBA to review all size
standards every 5 years and make necessary adjustments to reflect
current industry and market conditions. In accordance with the Jobs
Act, in early 2016 SBA completed the first 5-year review of all size
standards--except those for agricultural enterprises for which size
standards were previously set by Congress--and made appropriate
adjustments to size standards for a number of industries to reflect
current industry and Federal market conditions.
During the previous 5-year comprehensive review SBA reviewed the
receipts-based size standards for 17 industries and 1 exception within
NAICS Sector 61; 39 industries within Sector 62; 25 industries within
Sector 71; 15 industries within Sector 72; and 48 industries within
Sector 81. These reviews of receipts-based size standards occurred from
October 2010 to December 2013. SBA's analyses of the relevant industry
and Federal contracting data available at that time supported lowering
size standards for 41 industries and 1 exception in these sectors.
However, taking into consideration economic conditions at the time, SBA
decided to either retain all size standards for which the industry
analysis suggested a lower size standard at existing levels or bring
them up to the relevant common size standard. In the final rules, SBA
increased receipts-based size standards for 77 of those industries,
including 9 industries in Sector 61 (77 FR 58739, September 24, 2012),
28 industries in Sector 62 (77 FR 58755, September 24, 2012), 17
industries in Sector 71 (78 FR 37417, June 20, 2013), 5 industries in
Sector 72 (75 FR 61604, October 6, 2010), and 18 industries in Sector
81 (75 FR 61591, October 6, 2010). SBA retained the existing size
standards for the remaining 68 industries and 1 exception in these
sectors. Table 1, Size Standards Revisions During the First 5-Year
Review, provides a summary of these revisions by NAICS sector.
Table 1--Size Standards Revisions During the First 5-Year Review
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Number of size Number of size Number size Number of size
NAICS sector Sector name standards standards standards standards
reviewed increased lowered maintained
----------------------------------------------------------------------------------------------------------------
61............................ Education 18 9 0 9
Services.
62............................ Health Care and 39 28 0 11
Social
Assistance.
71............................ Arts, 25 17 0 8
Entertainment
and Recreation.
72............................ Accommodation 15 5 0 10
and Food
Services.
81............................ Other Services.. 48 18 0 30
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All Sectors............... ................ 145 77 0 68
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[[Page 76391]]
Currently, there are 27 different size standards levels covering
1,023 NAICS industries and 14 subindustry activities (commonly known as
``exceptions'' in SBA's table of size standards). 16 of these size
levels are based on average annual receipts, 9 are based on average
number of employees, and 2 are based on other measures.
SBA also adjusts its monetary-based size standards for inflation at
least once every 5 years. An interim final rule on SBA's latest
inflation adjustment to size standards, effective August 19, 2019, was
published in the Federal Register on July 18, 2019 (84 FR 34261). SBA
also updates its size standards, every 5 years to adopt the Office of
Management and Budget's (OMB) quinquennial NAICS revisions to its table
of small business size standards. Effective October 1, 2017, SBA
adopted the OMB's 2017 NAICS revisions to its size standards (82 FR
44886, September 27, 2017).
This proposed rule is one of a series of proposed rules that will
review size standards of industries grouped by various NAICS sectors.
Rather than review all size standards at one time, SBA is reviewing
size standards by grouping industries within various NAICS sectors that
use the same size measure (i.e., employees or receipts). In the current
review, SBA will review size standards in 6 groups of NAICS sectors.
(In the prior review, SBA reviewed size standards mostly on a sector-
by-sector basis.) Once SBA completes its review of size standards for a
group of sectors, it issues for public comments a proposed rule to
revise size standards for those industries based on the latest
available data and other factors deemed relevant by the SBA's
Administrator.
Below is a discussion of SBA's revised ``Size Standards
Methodology'' (Methodology), available at www.sba.gov/size, for
establishing, reviewing, or modifying receipts-based size standards
that SBA has applied to this proposed rule. SBA examines the structural
characteristics of an industry as a basis to assess industry
differences and the overall degree of competitiveness of an industry
and of firms within the industry. Industry structure is typically
examined by analyzing 4 primary factors--average firm size, degree of
competition within an industry, start-up costs and entry barriers, and
distribution of firms by size. To assess the ability of small
businesses to compete for Federal contracting opportunities under the
current size standards, as the fifth primary factor, SBA also examines,
for each industry averaging $20 million or more in average annual
Federal contract dollars, the small business share in Federal contract
dollars relative to the small business share in total industry's
receipts. When necessary, SBA also considers other secondary factors
that are relevant to the industries and the interests of small
businesses, including impacts of size standards changes on small
businesses.
Size Standards Methodology
SBA has recently revised its Methodology for establishing,
reviewing, or modifying size standards when necessary. See the
notification in the April 11, 2019, edition of the Federal Register (84
FR 14587). The revised methodology is available on SBA's size standards
web page at www.sba.gov/size. Prior to finalizing the revised
Methodology, SBA issued a notification in the April 27, 2018 edition of
the Federal Register (83 FR 18468) to solicit comments from the public
and notify stakeholders of the proposed changes to the Methodology. SBA
considered all public comments in finalizing the revised Methodology.
For a summary of comments and SBA's responses, refer to the SBA's April
11, 2019, Federal Register notification.
The revised Methodology represents a major change from the previous
methodology, which was issued on October 21, 2009 (74 FR 53940).
Specifically, in its revised Methodology SBA is replacing the
``anchor'' approach applied in the previous methodology with a
``percentile'' approach for evaluating differences in characteristics
among various industries. Under the ``anchor'' approach, SBA generally
evaluated the characteristics of individual industries relative to the
average characteristics of industries with the anchor size standard to
determine whether they should have a higher or a lower size standard
than the anchor. In the ``percentile'' approach, SBA ranks each
industry among all industries with the same measure of size standards
(such as receipts or employees) in terms of 4 primary industry factors,
discussed in the Industry Analysis subsection below. The ``percentile''
approach is explained more fully elsewhere in this proposed rule. For a
more detailed explanation please see the revised methodology at
www.sba.gov/size. Additionally, as the fifth factor, SBA evaluates the
difference between the small business share in Federal contract dollars
and the small business share in total industry's receipts to compute
the size standard for the Federal contracting factor. The overall size
standard for an industry is then obtained by averaging all size
standards supported by each primary factor. The evaluation of the
Federal contracting factor is explained more fully elsewhere in this
proposed rule.
SBA does not apply all aspects of its Methodology to all proposed
rules because not all features are relevant for every industry covered
by each proposed rule. For example, since all industries covered by
this proposed rule have receipts-based size standards, the Methodology
described in this proposed rule applies only to establishing,
reviewing, or modifying receipts-based size standards. SBA's
Methodology is available on its website at www.sba.gov/size.
Industry Analysis
Congress granted SBA's Administrator discretion to establish
detailed small business size standards (see 15 U.S.C. 632(a)(2)).
Specifically, section 3(a)(3) of the Small Business Act (15 U.S.C.
632(a)(3)) requires that ``. . .the [SBA] Administrator shall ensure
that the size standard varies from industry to industry to the extent
necessary to reflect the differing characteristics of the various
industries and consider other factors deemed to be relevant by the
Administrator.'' Accordingly, the economic structure of an industry is
the basis for establishing, reviewing, or modifying small business size
standards. In addition, SBA considers current economic conditions, its
mission and program objectives, the Administration's current policies,
impacts on small businesses under current size and proposed or revised
size standards, suggestions from industry groups and Federal agencies,
and public comments on the proposed rule. SBA also examines whether a
size standard based on industry and other relevant data successfully
excludes businesses that are dominant in the industry.
The goal of SBA's size standards review is to determine whether its
existing small business size standards reflect the current industry
structure and Federal market conditions and revise them when the latest
available data suggest that revisions are warranted. In the past, SBA
compared the characteristics of each industry with the average
characteristics of a group of industries associated with the ``anchor''
size standard. For example, in the first 5-year comprehensive review of
size standards under the Jobs Act, $7 million (now $8.0 million due to
the inflation adjustment in 2019; see 84 FR 34261 (July 18, 2019)) was
considered the ``anchor'' for receipts-based size standards and 500
employees was the ``anchor'' for employee-based size standards. If the
characteristics of a
[[Page 76392]]
specific industry under review were similar to the average
characteristics of industries in the anchor group, SBA generally
adopted the anchor size standard for that industry. If the specific
industry's characteristics were significantly different from those in
the anchor group, SBA assigned a size standard that was higher or lower
than the anchor. To determine a size standard above or below the anchor
size standard, SBA evaluated the characteristics of a second comparison
group of industries with higher size standards. For industries with
receipts-based standards, the second comparison group consisted of
industries with size standards between $23 million and $35.5 million,
with the weighted average size standard for the group equaling $29
million. For manufacturing industries and other industries with
employee-based size standards (except for Wholesale Trade and Retail
Trade), the second comparison group included industries with a size
standard of 1,000 employees or 1,500 employees, with the weighted
average size standard of 1,323 employees. Using the anchor size
standard and average size standard for the second comparison group, SBA
computed a size standard for an industry's characteristic (factor)
based on the industry's position for that factor relative to the
average values of the same factor for industries in the anchor and
second comparison groups.
Under the ``percentile'' approach, for each industry factor, an
industry is ranked and compared with the 20th percentile and 80th
percentile values of that factor among the industries sharing the same
measure of size standards (i.e., receipts or employees). Combining that
result with the 20th percentile and 80th percentile values of size
standards among the industries with the same measure of size standards,
SBA computes a size standard supported by each industry factor for each
industry. In the previous Methodology, comparison industry groups were
predetermined independent of the data, while in the revised Methodology
they are established using the actual data. A more detailed description
of the percentile method is provided in SBA's Methodology, available at
www.sba.gov/size.
The primary factors that SBA evaluates to examine industry
structure include average firm size, startup costs and entry barriers,
industry competition, and distribution of firms by size. SBA also
evaluates, as an additional primary factor, small business success in
receiving Federal contracting assistance under the current size
standards. Specifically, for the Federal contracting factor, SBA
examines the small business share of Federal contract dollars relative
to small business share of total receipts within an industry. These
are, generally, the 5 most important factors SBA examines when
establishing, reviewing, or revising a size standard for an industry.
However, SBA will also consider and evaluate other secondary factors
that it believes are relevant to a particular industry (such as
technological changes, growth trends, SBA financial assistance, and
other program factors). SBA also considers possible impacts of size
standard revisions on eligibility for Federal small business
assistance, current economic conditions, the Administration's policies,
and suggestions from industry groups and Federal agencies. Public
comments on proposed rules also provide important additional
information. SBA thoroughly reviews all public comments before making a
final decision on its proposed revisions to size standards. Below are
brief descriptions of each of the 5 primary factors that SBA has
evaluated for each industry being reviewed in this proposed rule. A
more detailed description of this analysis is provided in the SBA's
Methodology, available at www.sba.gov/size.
1. Average Firm Size
SBA computes 2 measures of average firm size: Simple average and
weighted average. For industries with receipts-based size standards,
the simple average is the total receipts of the industry divided by the
total number of firms in the industry. The weighted average firm size
is the summation of all the receipts of the firms in an industry
multiplied by their share of receipts in the industry. The simple
average weighs all firms within an industry equally regardless of their
size. The weighted average overcomes that limitation by giving more
weight to larger firms. The size standard supported by average firm
size is obtained by averaging size standards supported by simple
average firm size and weighted average firm size.
If the average firm size of an industry is higher than the average
firm size for most other industries, this would generally support a
size standard higher than the size standards for other industries.
Conversely, if the industry's average firm size is lower than that of
most other industries, it would provide a basis to assign a lower size
standard as compared to size standards for most other industries.
2. Startup Costs and Entry Barriers
Startup costs reflect a firm's initial size in an industry. New
entrants to an industry must have sufficient capital and other assets
to start and maintain a viable business. If firms entering an industry
under review have greater capital requirements than firms in most other
industries, all other factors remaining the same, this would be a basis
for a higher size standard. Conversely, if the industry has smaller
capital needs compared to most other industries, a lower size standard
would be considered appropriate.
Given the lack of actual data on startup costs and entry barriers
by industry, SBA uses average assets as a proxy for startup costs and
entry barriers. To calculate average assets, SBA begins with the sales
to total assets ratio for an industry from the Risk Management
Association's Annual Statement Studies, available at https://rmau.org.
SBA then applies these ratios to the average receipts of firms in that
industry obtained from the Economic Census tabulation. An industry with
average assets that are significantly higher than most other industries
is likely to have higher startup costs; this in turn will support a
higher size standard. Conversely, an industry with average assets that
are similar to or lower than most other industries is likely to have
lower startup costs; this will support either lowering or maintaining
the size standard.
3. Industry Competition
Industry competition is generally measured by the share of total
industry receipts generated by the largest firms in an industry. SBA
generally evaluates the share of industry receipts generated by the 4
largest firms in each industry. This is referred to as the ``4-firm
concentration ratio,'' a commonly used economic measure of market
competition. Using the 4-firm concentration ratio, SBA compares the
degree of concentration within an industry to the degree of
concentration of the other industries with the same measure of size
standards. If a significantly higher share of economic activity within
an industry is concentrated among the 4 largest firms compared to most
other industries, all else being equal, SBA would set a size standard
that is relatively higher than for most other industries. Conversely,
if the market share of the 4 largest firms in an industry is
appreciably lower than the similar share for most other industries, the
industry will be assigned a size standard that is lower than those for
most other industries.
4. Distribution of Firms by Size
SBA examines the shares of industry total receipts accounted for by
firms of
[[Page 76393]]
different receipts and employment sizes in an industry. This is an
additional factor SBA considers in assessing competition within an
industry besides the 4-firm concentration ratio. If the preponderance
of an industry's economic activity is attributable to smaller firms,
this generally indicates that small businesses are competitive in that
industry, which would support adopting a smaller size standard. A
higher size standard would be supported for an industry in which the
distribution of firms indicates that most of the economic activity is
concentrated among the larger firms.
Concentration is a measure of inequality of distribution. To
determine the degree of inequality of distribution in an industry, SBA
computes the Gini coefficient, using the Lorenz curve. The Lorenz curve
presents the cumulative percentages of units (firms) along the
horizontal axis and the cumulative percentages of receipts (or other
measures of size) along the vertical axis. (For further detail, see
SBA's Methodology on its website at www.sba.gov/size.) Gini coefficient
values vary from zero to one. If receipts are distributed equally among
all the firms in an industry, the value of the Gini coefficient will
equal zero. If an industry's total receipts are attributed to a single
firm, the Gini coefficient will equal one.
SBA compares the degree of inequality of distribution for an
industry under review with other industries with the same type of size
standards. If an industry shows a higher degree of inequality of
distribution (hence a higher Gini coefficient value) compared to most
other industries in the group this would, all else being equal, warrant
a size standard that is higher than the size standards assigned to most
other industries. Conversely, an industry with lower degree of
inequality (i.e., a lower Gini coefficient value) than most others will
be assigned a lower size standard relative to others.
5. Federal Contracting
As the fifth factor, SBA examines the success small businesses are
having in winning Federal contracts under the current size standard as
well as the possible impact a size standard change may have on Federal
small business contracting opportunities. The Small Business Act
requires the Federal Government to ensure that small businesses receive
a ``fair proportion'' of Federal contracts. The legislative history
also discusses the importance of size standards in Federal contracting.
To incorporate the Federal contracting factor in the size standards
analysis, SBA evaluates small business participation in Federal
contracting in terms of the share of total Federal contract dollars
awarded to small businesses relative to the small business share of
industry's total receipts. In general, if the share of Federal contract
dollars awarded to small businesses in an industry is significantly
smaller than the small business share of total industry's receipts, all
else remaining the same, a justification would exist for considering a
size standard higher than the current size standard. In cases where
small business share of the Federal market is already appreciably high
relative to the small business share of the overall market, SBA
generally assumes that the existing size standard is adequate with
respect to the Federal contracting factor.
The disparity between the small business Federal market share and
industry-wide small business share may be due to various factors, such
as extensive administrative and compliance requirements associated with
Federal contracts, the different skill set required to perform Federal
contracts as compared to typical commercial contracting work, and the
size of Federal contracts. These, as well as other factors, are likely
to influence the type of firms within an industry that compete for
Federal contracts. By comparing the small business Federal contracting
share with the industry-wide small business share, SBA includes in its
size standards analysis the latest Federal market conditions.
Besides the impact on Federal contracting, SBA also examines
impacts on SBA's loan programs both under the current and revised size
standards.
Sources of Industry and Program Data
SBA's primary source of industry data used in this proposed rule
for evaluating industry characteristics and developing size standards
is a special tabulation of the Economic Census from the U.S. Census
Bureau (https://www.census.gov/programs-surveys/economic-census.html).
The tabulation based on the 2012 Economic Census is the latest
available. The special tabulation provides industry data on the number
of firms, number of establishments, number of employees, annual
payroll, and annual receipts of companies by Industry (6-digit level),
Industry Group (4-digit level), Subsector (3-digit level), and Sector
(2-digit level). These data are arrayed by various classes of firms'
size based on the overall number of employees and receipts of the
entire enterprise (all establishments and affiliated firms) from all
industries. The special tabulation also contains information for
different levels of NAICS categories on average and median firm size in
terms of both receipts and employment, total receipts generated by the
4 and 8 largest firms, the Herfindahl-Hirschman Index (HHI), the Gini
coefficient, and size distributions of firms by various receipts and
employment size groupings.
In some cases, where data were not available due to disclosure
prohibitions in the Census Bureau's tabulation, SBA either estimated
missing values using available relevant data or examined data at a
higher level of industry aggregation, such as at the NAICS 2-digit
(Sector), 3-digit (Subsector), or 4-digit (Industry Group) level. In
some instances, SBA's analysis was based only on those factors for
which data were available or estimates of missing values were possible.
To evaluate some industries that are not covered by the Economic
Census, SBA used a similar special tabulation of the latest County
Business Patterns (CBP) published by the U.S. Census Bureau
(www.census.gov/programs-surveys/cbp.html). Similarly, to evaluate
industries in NAICS Sector 11 that are also not covered by the Economic
Census and CBP, SBA evaluated a similar special tabulation based on the
2012 Census of Agriculture (www.nass.usda.gov) from the National
Agricultural Statistics Service (NASS). Besides the Economic Census,
Agricultural Census and CBP tabulations, SBA also evaluates relevant
industry data from other sources when necessary, especially for
industries that are not covered by the Economic Census or CBP. These
include the Quarterly Census of Employment and Wages (QCEW, also known
as ES-202 data) (www.bls.gov/cew/) and Business Employment Dynamics
(BED) data (www.bls.gov/bdm/) from the U.S. Bureau of Labor Statistics.
Similarly, to evaluate certain financial industries that have assets-
based size standards, SBA examines the data from the Statistics on
Depository Institutions (SDI) database (www5.fdic.gov/sdi/main.asp) of
the Federal Depository Insurance Corporation (FDIC). Finally, to
evaluate the capacity component of the Petroleum Refiners (NAICS
324110) size standard, SBA evaluates the petroleum production data from
the Energy Information Administration (www.eia.gov).
To calculate average assets, SBA used sales to total assets ratios
from the Risk Management Association's Annual eStatement Studies, 2016-
2018 (https://rmau.org). To evaluate Federal contracting trends, SBA
examined the data on Federal prime contract awards
[[Page 76394]]
from the Federal Procurement Data System--Next Generation (FPDS-NG)
(www.fpds.gov) for fiscal years 2016-2018. To assess the impact on
financial assistance to small businesses, SBA examined its internal
data on 7(a) and 504 loan programs for fiscal years 2016-2018. For some
portion of impact analysis, SBA also evaluated the data from the System
of Award Management (www.sam.gov). Data sources and estimation
procedures SBA uses in its size standards analysis are documented in
detail in SBA's Methodology, which is available at www.sba.gov/size.
Dominance in Field of Operation
Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a
small business concern as one that is: (1) Independently owned and
operated; (2) not dominant in its field of operation; and (3) within a
specific small business definition or size standard established by SBA
Administrator. SBA considers as part of its evaluation whether a
business concern at a proposed size standard would be dominant in its
field of operation. For this, SBA generally examines the industry's
market share of firms at the proposed or revised size standard as well
as the distribution of firms by size. Market share and size
distribution may indicate whether a firm can exercise a major
controlling influence on a national basis in an industry where a
significant number of business concerns are engaged. If a contemplated
size standard includes a dominant firm, SBA will consider a lower size
standard to exclude the dominant firm from being defined as small.
Selection of Size Standards
In the 2009 Methodology SBA applied to the first 5-year
comprehensive review of size standards, SBA adopted a fixed number of
size standards levels as part of its effort to simplify size standards.
In response to public comments to the 2009 Methodology white paper, and
the 2013 amendment to the Small Business Act (section 3(a)(8)) under
section 1661 of the National Defense Authorization Act for Fiscal Year
2013 (``NDAA 2013'') (Pub. L. 112-239, January 2, 2013), in the revised
Methodology, SBA relaxed the limitation on the number of small business
size standards. Specifically, section 1661 of NDAA 2013 states ``SBA
cannot limit the number of size standards, and shall assign the
appropriate size standard to each industry identified by NAICS.''
In the revised Methodology, SBA calculates a separate size standard
for each NAICS industry. However, to account for errors and limitations
associated with various data SBA evaluates in the size standards
analysis, SBA rounds the calculated size standard value for a receipts-
based size standard to the nearest $500,000, except for agricultural
industries in Subsectors 111 and 112 for which the calculated size
standards will be rounded to the nearest $250,000. This rounding
procedure is applied both in calculating a size standard for each of
the 5 primary factors and in calculating the overall size standard for
the industry.
As a policy decision, SBA continues to maintain the minimum and
maximum levels for both receipts and employee-based size standards.
Accordingly, SBA will not generally propose or adopt a size standard
that is either below the minimum level or above the maximum, even
though the calculations yield values below the minimum or above the
maximum. The minimum size standard reflects the size an established
small business should be to have adequate capabilities and resources to
be able to compete for and perform Federal contracts (but does not
account for small businesses that are newly formed or just starting
operations). On the other hand, the maximum size standard represents
the level above which businesses, if qualified as small, would
outcompete much smaller businesses when accessing Federal assistance.
With respect to receipts-based size standards, SBA has established
$6 million and $41.5 million, respectively, as the minimum and maximum
size standard levels (except for most agricultural industries in NAICS
Subsectors 111 and 112). These levels reflect the current minimum of
$6.0 million and the current maximum of $41.5 million. The industry
data suggests that $6 million minimum and $41.5 million maximum size
standards would be too high for agricultural industries. Accordingly,
SBA has established $1 million as the minimum size standard and $5
million as the maximum size standard for industries in Subsector 111
(Crop Production) and Subsector 112 (Animal Production and
Aquaculture).
Evaluation of Industry Factors
As mentioned earlier, to assess the appropriateness of the current
size standards SBA evaluates the structure of each industry in terms of
4 economic characteristics or factors, namely average firm size,
average assets size as a proxy for startup costs and entry barriers,
the 4-firm concentration ratio as a measure of industry competition,
and size distribution of firms using the Gini coefficient. For each
size standard type (i.e., receipts-based or employee-based) SBA ranks
industries both in terms of each of the 4 industry factors and in terms
of the existing size standard and computes the 20th percentile and 80th
percentile values for both. SBA then evaluates each industry by
comparing its value for each industry factor to the 20th percentile and
80th percentile values for the corresponding factor for industries
under a particular type of size standard.
If the characteristics of an industry under review within a
particular size standard type are similar to the average
characteristics of industries within the same size standard type in the
20th percentile, SBA will consider adopting as an appropriate size
standard for that industry the 20th percentile value of size standards
for those industries. For each size standard type, if the industry's
characteristics are similar to the average characteristics of
industries in the 80th percentile, SBA will assign a size standard that
corresponds to the 80th percentile in the size standard rankings of
industries. A separate size standard is established for each factor
based on the amount of differences between the factor value for an
industry under a particular size standard type and 20th percentile and
80th percentile values for the corresponding factor for all industries
in the same type. Specifically, the actual level of the new size
standard for each industry factor is derived by a linear interpolation
using the 20th percentile and 80th percentile values of that factor and
corresponding percentiles of size standards. Each calculated size
standard is bounded between the minimum and maximum size standards
levels, as discussed before. As noted earlier, the calculated value for
a receipts-based size standard for each industry factor is rounded to
the nearest $500,000, except for industries in Subsectors 111 and 112
for which a calculated size standard is rounded to the nearest
$250,000.
Table 2, 20th and 80th Percentiles of Industry Factors for
Receipts-based Size Standards, shows the 20th percentile and 80th
percentile values for average firm size (simple and weighted), average
assets size, 4-firm concentration ratio, and Gini coefficient for
industries with receipts-based size standards.
[[Page 76395]]
Table 2--20th and 80th Percentiles of Industry Factors for Receipts-Based Size Standards
----------------------------------------------------------------------------------------------------------------
Simple Weighted
average average Average 4-firm Gini
Industries/percentiles receipts size receipts size assets size concentration coefficient
($ million) ($ million) ($ million) ratio (%)
----------------------------------------------------------------------------------------------------------------
Industries, excluding Subsectors 111 and 112
----------------------------------------------------------------------------------------------------------------
20th percentile................. 0.83 19.42 0.34 7.9 0.686
80th percentile................. 7.52 830.65 5.19 42.4 0.834
----------------------------------------------------------------------------------------------------------------
Industries in Subsectors 111 and 112
----------------------------------------------------------------------------------------------------------------
20th percentile................. 0.06 1.48 0.07 1.7 0.608
80th percentile................. 0.83 13.32 0.88 12.3 0.908
----------------------------------------------------------------------------------------------------------------
Estimation of Size Standards Based on Industry Factors
An estimated size standard supported by each industry factor is
derived by comparing its value for a specific industry to the 20th
percentile and 80th percentile values for that factor. If an industry's
value for a particular factor is near the 20th percentile value in the
distribution, the supported size standard will be one that is close to
the 20th percentile value of size standards for industries in the size
standards group, which is $8.0 million. If a factor for an industry is
close to the 80th percentile value of that factor, it would support a
size standard that is close to the 80th percentile value in the
distribution of size standards, which is $35.0 million. For a factor
that is within, above, or below the 20-80th percentile range, the size
standard is calculated using linear interpolation based on the 20th
percentile and 80th percentile values for that factor and the 20th
percentile and 80th percentile values of size standards.
For example, if an industry's simple average receipts are $1.9
million, that would support a size standard of $11.5 million. According
to Table 2, the 20th percentile and 80th percentile values of average
receipts are $0.83 million and $7.52 million, respectively. The $1.9
million is 15.9% between the 20th percentile value ($0.83 million) and
the 80th percentile value ($7.52 million) of simple average receipts
(($1.9 million-$0.83 million) / ($7.52 million-$0.83 million) = 0.159
or 15.9%). Applying this percentage to the difference between the 20th
percentile value ($8 million) and 80th percentile ($35.0 million) value
of size standards and then adding the result to the 20th percentile
size standard value ($8.0 million) yields a calculated size standard
value of $12.32 million ([{$35.0 million-$8.0 million{time} * 0.159] +
$8.0 million = $11.49 million). The final step is to round the
calculated $11.49 million size standard to the nearest $500,000, which
in this example yields $11.5 million. This procedure is applied to
calculate size standards supported by other industry factors.
Detailed formulas involved in these calculations are presented in
SBA's Methodology,'' which is available on its website at www.sba.gov/size.
Derivation of Size Standards Based on Federal Contracting Factor
Besides industry structure, SBA also evaluates Federal contracting
data to assess the success of small businesses in getting Federal
contracts under the existing size standards. For each industry with $20
million or more in annual Federal contract dollars, SBA evaluates the
small business share of total Federal contract dollars relative to the
small business share of total industry receipts. All other factors
being equal, if the share of Federal contracting dollars awarded to
small businesses in an industry is significantly less than the small
business share of that industry's total receipts, a justification would
exist for considering a size standard higher than the current size
standard. Conversely, if the small business share of Federal
contracting activity is near or above the small business share in total
industry receipts, this will support the current size standard.
SBA increases the existing size standards by certain percentages
when the small business share of total industry receipts exceeds the
small business share of total Federal contract dollars by 10 or more
percentage points. Proposed percentage increases generally reflect
receipts levels needed to bring the small business share of Federal
contracts on par with the small business share of industry receipts.
These proposed percentage increases for receipts-based size standards
are given in Table 3, Proposed Adjustments to Size Standards Based on
Federal Contracting Factor.
Table 3--Proposed Adjustments to Size Standards Based on Federal Contracting Factor
----------------------------------------------------------------------------------------------------------------
Percentage difference between the small business shares of total Federal
contract dollars in an industry and of total industry receipts
Size standards --------------------------------------------------------------------------
>-10% -10% to -30% <-30%
----------------------------------------------------------------------------------------------------------------
Receipts-based standards:
<$15 million..................... No change.............. Increase 30%........... Increase 60%.
$15 million to <$25 million...... No change.............. Increase 20%........... Increase 40%.
$25 million to <$41.5 million.... No change.............. Increase 15%........... Increase 25%.
----------------------------------------------------------------------------------------------------------------
For example, if an industry with the current size standard of $8.0
million had an average of $50 million in Federal contracting dollars,
of which 15% went to small businesses, and if that small businesses
accounted for 40% of total receipts of that industry, the small
business share of total Federal contract dollars would be 25 percentage
points less than the small business share of total industry receipts
(40%-15%). According to the above rule, the new
[[Page 76396]]
size standard for the Federal contracting factor for that industry
would be set by multiplying the current $8.0 million standard by 1.3
(i.e., 30% increase) and then by rounding the result to the nearest
$500,000, yielding a size standard of $10.5 million.
SBA evaluated the small business share of total Federal contract
dollars for the 54 industries covered by this proposed rule--13 in
Sector 61, 26 in Sector 62, 2 in Sector 71, 2 in Sector 72, and 11 in
Sector 81--that had $20 million or more in average annual Federal
contract dollars during fiscal years 2016-2018. The Federal contracting
factor was significant (i.e., the difference between the small business
share of total industry receipts and small business share of Federal
contracting dollars was 10 percentage points or more) in 29 of these
industries, prompting an upward adjustment of their existing size
standards based on that factor. For the remaining 25 industries that
averaged $20 million or more in average annual contract dollars, the
Federal contracting factor was not significant, and the existing size
standard was applied for that factor. For industries with less than $20
million in average annual contract dollars no size standard was
calculated for the Federal contracting factor.
Derivation of Overall Industry Size Standard
The SBA's Methodology presented above results in 5 separate size
standards based on evaluation of the 5 primary factors (i.e., 4
industry factors and one Federal contracting factor). SBA typically
derives an industry's overall size standard by assigning equal weights
to size standards supported by each of these 5 factors. However, if
necessary, SBA's Methodology would allow assigning different weights to
some of these factors in response to its policy decisions and other
considerations. For detailed calculations, see SBA's Methodology,
available on its website at www.sba.gov/size.
Calculated Size Standards Based on Industry and Federal Contracting
Factors
Table 4, Size Standards Supported by Each Factor for Each Industry
(Receipts), below, shows the results of analyses of industry and
Federal contracting factors for each industry and subindustry
(exception) covered by this proposed rule. NAICS industries in columns
2, 3, 4, 5, 6, 7, and 8 show 2 numbers. The upper number is the value
for the industry or Federal contracting factor shown on the top of the
column and the lower number is the size standard supported by that
factor. Column 9 shows a calculated new size standard for each
industry. This is the average of the size standards supported by each
factor (the size standard for average firm size is an average of size
standards supported by simple average firm size and weighted average
firm size), rounded to the nearest $500,000 for non-agriculture
industries and rounded to the nearest $250,000 for agriculture
industries. Analytical details involved in the averaging procedure are
described in SBA's Methodology, which is available on its website at
www.sba.gov/size. For comparison with the calculated new size
standards, the current size standards are in column 10 of Table 4.
Table 4--Size Standards Supported by Each Factor for Each Industry (Receipts)
[Upper value = calculated factor, lower value = size standard supported]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Simple Weighted Calculated Current
average average Average Four-firm Gini Federal size size
NAICS code NAICS industry title Type firm size firm size assets size ratio % coefficient contract standard ($ standard ($
($ million) ($ million) ($ million) factor (%) million) million)
(1) (2)............ (3) (4) (5) (6) (7) (8) (9) (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
611110 Elementary and Secondary Factor......... $4.0 $31.8 $6.6 2.0 0.683 -48.4 ........... ...........
Schools. Size Std....... 20.5 8.5 41.5 $6.0 $7.5 $19.0 $17.5 $12.0
611210 Junior Colleges......... Factor......... 18.2 291.6 30.3 27.7 0.779 39.0 ........... ...........
Size Std....... 41.5 17.0 41.5 $23.5 $25.0 $22.0 28.5 22.0
611310 Colleges, Universities, Factor......... 97.7 1,801.8 244.1 9.8 0.802 -1.2 ........... ...........
and Professional Schools. Size Std....... 41.5 41.5 41.5 $9.5 $29.0 $30.0 30.5 30.0
611410 Business and Secretarial Factor......... 2.0 14.1 0.8 38.7 0.747 ........... ........... ...........
Schools. Size Std....... 13.0 8.0 10.5 $32.0 $19.0 18.0 8.0
611420 Computer Training....... Factor......... 1.3 27.3 0.5 18.8 0.774 3.8 ........... ...........
Size Std....... 9.5 8.5 8.5 $16.5 $24.0 $12.0 14.0 12.0
611430 Professional and Factor......... 1.2 25.6 0.6 7.8 0.762 -17.1 ........... ...........
Management Development Size Std....... 9.5 8.0 9.5 $8.0 $22.0 $15.5 13.0 12.0
Training.
611511 Cosmetology and Barber Factor......... 1.4 28.9 1.1 19.9 0.678 ........... ........... ...........
Schools. Size Std....... 10.0 8.5 12.5 $17.5 $6.5 11.5 8.0
611512 Flight Training......... Factor......... 3.2 311.3 2.0 53.2 0.831 -3.7 ........... ...........
Size Std....... 17.5 17.5 17.5 $41.5 $34.5 $30.0 28.0 30.0
611513 Apprenticeship Training. Factor......... 1.2 8.9 0.7 11.4 0.683 -57.1 ........... ...........
Size Std....... 9.5 7.5 10.0 $10.5 $7.5 $13.0 10.0 8.0
611519 Other Technical and Factor......... 2.3 105.2 1.6 18.0 0.815 -9.9 ........... ...........
Trade Schools. Size Std....... 14.0 11.0 15.0 $16.0 $31.5 $16.5 18.5 16.5
Exception, Job Corps Centers... Factor......... 166.5 1,031.7 116.2 83.5 0.686 20.3 ........... ...........
Size Std....... 41.5 41.5 41.5 $41.5 $19.0 $41.5 37.0 41.5
611610 Fine Arts Schools....... Factor......... 0.3 2.1 0.4 2.2 0.593 ........... ........... ...........
Size Std....... 6.0 7.5 8.0 $6.0 $6.0 7.0 8.0
611620 Sports and Recreation Factor......... 0.4 12.9 0.1 7.7 0.616 ........... ........... ...........
Instruction. Size Std....... 6.0 8.0 7.0 $8.0 $6.0 7.0 8.0
611630 Language Schools........ Factor......... 1.1 64.3 0.5 35.4 0.804 19.9 ........... ...........
Size Std....... 9.0 9.5 9.0 $29.5 $29.5 $12.0 18.0 12.0
611691 Exam Preparation and Factor......... 0.6 33.5 0.3 13.6 0.724 -36.1 ........... ...........
Tutoring. Size Std....... 7.0 8.5 7.5 $12.5 $15.0 $13.0 11.0 8.0
611692 Automobile Driving Factor......... 0.3 4.2 0.2 13.5 0.639 -50.3 ........... ...........
Schools. Size Std....... 6.0 7.5 7.0 $12.5 $6.0 $13.0 9.0 8.0
611699 All Other Miscellaneous Factor......... 0.7 64.0 0.6 23.6 0.760 -5.5 ........... ...........
Schools and Instruction. Size Std....... 7.5 9.5 9.5 $20.5 $21.5 $12.0 14.5 12.0
611710 Educational Support Factor......... 1.9 308.3 1.6 28.7 0.829 -1.7 ........... ...........
Services. Size Std....... 12.0 17.5 15.0 $24.5 $34.0 $16.5 21.0 16.5
621111 Offices of Physicians Factor......... 2.3 523.8 0.4 5.5 0.739 -37.6 ........... ...........
(except Mental Health Size Std....... 14.0 25.0 8.0 $6.0 $17.5 $19.0 14.0 12.0
Specialists).
621112 Offices of Physicians, Factor......... 0.5 4.2 0.1 3.7 0.583 -12.3 ........... ...........
Mental Health Specialists. Size Std....... 6.5 7.5 6.5 $6.0 $6.0 $15.5 8.0 12.0
621210 Offices of Dentists..... Factor......... 0.8 19.1 0.3 2.0 0.482 -22.5 7.5 8.0
Size Std....... 8.0 8.0 7.5 $6.0 $6.0 $10.5
621310 Offices of Chiropractors Factor......... 0.3 1.0 0.1 0.8 0.469 ........... 6.5 8.0
Size Std....... 6.0 7.5 6.5 $6.0 $6.0
[[Page 76397]]
621320 Offices of Optometrists. Factor......... 0.6 2.7 0.1 1.4 0.502 ........... 6.5 8.0
Size Std....... 7.0 7.5 7.0 $6.0 $6.0
621330 Offices of Mental Health Factor......... 0.4 5.5 0.1 3.2 0.681 14.5 7.0 8.0
Practitioners (except Size Std....... 6.0 7.5 6.5 $6.0 $7.0 $8.0
Physicians).
621340 Offices of Physical, Factor......... 1.0 152.5 0.2 13.4 0.726 -25.2 11.0 8.0
Occupational and Speech Size Std....... 8.5 12.5 7.0 $12.5 $15.5 $10.5
Therapists, and Audiologists.
621391 Offices of Podiatrists.. Factor......... 0.5 1.5 0.1 1.2 0.492 ........... 6.5 8.0
Size Std....... 7.0 7.5 6.5 $6.0 $6.0
621399 Offices of All Other Factor......... 0.4 111.1 0.1 16.1 0.681 -8.5 9.0 8.0
Miscellaneous Health Size Std....... 6.5 11.0 6.5 $14.5 $7.0 $8.0
Practitioners.
621410 Family Planning Centers. Factor......... 1.6 32.9 1.1 18.0 0.793 ........... 16.5 12.0
Size Std....... 11.0 8.5 12.5 $16.0 $27.5
621420 Outpatient Mental Health Factor......... 3.0 19.7 1.7 3.4 0.728 -13.9 14.0 16.5
and Substance Abuse Centers. Size Std....... 16.5 8.0 16.0 $6.0 $15.5 $20.0
621491 HMO Medical Centers..... Factor......... 410.2 3,312.1 157.8 93.6 0.817 ........... 39.0 35.0
Size Std....... 41.5 41.5 41.5 $41.5 $32.0
621492 Kidney Dialysis Centers. Factor......... 37.2 5,760.6 18.6 86.2 0.870 -6.1 41.5 41.5
Size Std....... 41.5 41.5 41.5 $41.5 $41.5 $41.5
621493 Freestanding Ambulatory Factor......... 5.3 198.9 2.1 16.3 0.693 ........... 15.5 16.5
Surgical and Emergency Centers. Size Std....... 26.0 14.0 18.0 $14.5 $9.5
621498 All Other Outpatient Factor......... 6.6 208.7 3.5 9.5 0.801 -13.4 22.5 22.0
Care Centers. Size Std....... 31.5 14.5 25.5 $9.5 $29.0 $26.5
621511 Medical Laboratories.... Factor......... 9.7 2,287.8 4.1 42.4 0.842 -14.2 36.5 35.0
Size Std....... 41.5 41.5 28.5 $35.0 $36.5 $40.5
621512 Diagnostic Imaging Factor......... 3.4 56.0 1.5 7.4 0.759 32.3 15.0 16.5
Centers. Size Std....... 18.5 9.0 14.5 $7.5 $21.5 $16.5
621610 Home Health Care Factor......... 3.0 249.7 0.9 9.4 0.796 17.9 16.5 16.5
Services. Size Std....... 17.0 15.5 11.5 $9.0 $28.0 $16.5
621910 Ambulance Services...... Factor......... 3.9 337.1 1.8 29.1 0.777 -6.5 20.0 16.5
Size Std....... 20.5 18.5 16.0 $24.5 $24.5 $16.5
621991 Blood and Organ Banks... Factor......... 30.7 607.1 27.9 34.6 0.796 -14.6 34.5 35.0
Size Std....... 41.5 27.5 41.5 $29.0 $28.0 $40.5
621999 All Other Miscellaneous Factor......... 2.7 119.6 1.4 18.3 0.814 29.4 18.0 16.5
Ambulatory Health Care Size Std....... 15.5 11.5 13.5 $16.0 $31.0 $16.5
Services.
622110 General Medical and Factor......... 288.5 3,522.1 262.2 8.8 0.733 62.0 30.0 41.5
Surgical Hospitals. Size Std....... 41.5 41.5 41.5 $8.5 $16.5 $41.5
622210 Psychiatric and Factor......... 49.7 414.3 33.2 17.2 0.546 ........... 23.5 41.5
Substance Abuse Hospitals. Size Std....... 41.5 21.0 41.5 $15.5 $6.0
622310 Specialty (except Factor......... 113.3 1,124.0 81.0 27.2 0.713 ........... 30.0 41.5
Psychiatric and Substance Size Std....... 41.5 41.5 41.5 $23.0 $13.0
Abuse) Hospitals.
623110 Nursing Care Facilities Factor......... 12.7 512.2 8.5 11.2 0.694 -2.8 25.0 30.0
(Skilled Nursing Facilities). Size Std....... 41.5 24.5 41.5 $10.5 $9.5 $30.0
623210 Residential Intellectual Factor......... 3.5 85.6 2.3 9.9 0.749 ........... 15.5 16.5
and Developmental Disability Size Std....... 19.0 10.0 19.0 $9.5 $19.5
Facilities.
623220 Residential Mental Factor......... 3.2 52.7 2.3 8.9 0.701 -40.4 15.0 16.5
Health and Substance Abuse Size Std....... 17.5 9.0 19.0 $9.0 $11.0 $23.0
Facilities.
623311 Continuing Care Factor......... 7.9 99.3 19.9 8.5 0.733 ........... 22.5 30.0
Retirement Communities. Size Std....... 36.5 10.5 41.5 $8.5 $16.5
623312 Assisted Living Factor......... 1.8 389.5 2.6 22.7 0.779 ........... 20.5 12.0
Facilities for the Elderly. Size Std....... 12.0 20.5 20.5 $19.5 $25.0
623990 Other Residential Care Factor......... 2.6 24.0 2.0 6.4 0.730 -31.9 14.0 12.0
Facilities. Size Std....... 15.0 8.0 17.5 $7.0 $16.0 $19.0
624110 Child and Youth Services Factor......... 1.5 23.1 1.1 4.5 0.759 -42.9 13.5 12.0
Size Std....... 11.0 8.0 12.0 $6.0 $21.5 $19.0
624120 Services for the Elderly Factor......... 1.7 45.3 1.1 3.5 0.761 -27.5 13.0 12.0
and Persons with Disabilities. Size Std....... 11.5 9.0 12.0 $6.0 $21.5 $15.5
624190 Other Individual and Factor......... 1.4 83.1 1.1 6.9 0.777 -20.5 14.0 12.0
Family Services. Size Std....... 10.5 10.0 12.0 $7.0 $24.5 $15.5
624210 Community Food Services. Factor......... 2.6 38.6 2.2 6.0 0.816 ........... 17.0 12.0
Size Std....... 15.0 8.5 18.0 $6.5 $31.5
624221 Temporary Shelters...... Factor......... 1.4 11.0 2.0 5.9 0.623 -55.9 11.5 12.0
Size Std....... 10.0 7.5 17.0 $6.5 $6.0 $19.0
624229 Other Community Housing Factor......... 1.8 48.0 3.6 14.1 0.692 -54.1 16.5 6.5
Services. Size Std....... 12.0 9.0 26.0 $13.0 $9.0 $23.0
624230 Emergency and Other Factor......... 13.9 478.8 13.9 37.9 0.878 23.8 36.5 35.0
Relief Services. Size Std....... 41.5 23.5 41.5 $31.5 $41.5 $35.0
624310 Vocational Factor......... 2.9 48.1 1.8 8.3 0.728 24.9 13.0 12.0
Rehabilitation Services. Size Std....... 16.5 9.0 16.5 $8.5 $15.5 $12.0
624410 Child Day Care Services. Factor......... 0.5 93.8 0.2 8.4 0.687 ........... 8.5 8.0
Size Std....... 7.0 10.5 7.0 $8.5 $8.5
711110 Theater Companies and Factor......... 2.2 106.8 3.2 19.7 0.791 ........... 20.0 22.0
Dinner Theaters. Size Std....... 13.5 11.0 23.5 $17.5 $27.0
711120 Dance Companies......... Factor......... 1.4 15.6 0.7 24.7 0.771 ........... 16.0 12.0
Size Std....... 10.0 8.0 10.0 $21.0 $23.5
711130 Musical Groups and Factor......... 1.1 20.6 1.0 7.4 0.772 ........... 13.0 12.0
Artists. Size Std....... 9.0 8.0 12.0 $7.5 $23.5
711190 Other Performing Arts Factor......... 3.9 454.6 2.1 71.4 0.850 ........... 29.5 30.0
Companies. Size Std....... 20.5 22.5 17.5 $41.5 $38.0
711211 Sports Teams and Clubs.. Factor......... 25.9 218.1 21.6 8.2 0.858 ........... 29.5 41.5
Size Std....... 41.5 14.5 41.5 $8.0 $39.5
711212 Racetracks.............. Factor......... 12.8 256.3 10.7 26.0 0.865 ........... 33.5 41.5
Size Std....... 41.5 16.0 41.5 $22.0 $40.5
711219 Other Spectator Sports.. Factor......... 1.3 43.9 0.9 18.8 0.761 ........... 14.5 12.0
Size Std....... 9.5 9.0 11.0 $16.5 $21.5
711310 Promoters of Performing Factor......... 3.9 173.1 3.6 21.5 0.815 ........... 23.5 35.0
Arts, Sports, and Similar Size Std....... 20.5 13.0 26.0 $18.5 $31.5
Events with Facilities.
711320 Promoters of Performing Factor......... 2.1 274.6 0.9 29.3 0.791 ........... 19.5 16.5
Arts, Sports, and Similar Size Std....... 13.0 16.5 11.0 $25.0 $27.0
Events without Facilities.
[[Page 76398]]
711410 Agents and Managers for Factor......... 1.6 94.9 0.7 22.3 0.761 ........... 15.5 12.0
Artists, Athletes, Size Std....... 11.0 10.5 10.0 $19.5 $21.5
Entertainers, and Other Public
Figures.
711510 Independent Artists, Factor......... 0.7 9.5 0.2 2.0 0.704 10.3 8.0 8.0
Writers, and Performers. Size Std....... 7.5 7.5 7.5 $6.0 $11.5 $8.0
712110 Museums................. Factor......... 1.9 58.9 6.3 10.9 0.811 -16.8 25.5 30.0
Size Std....... 12.5 9.5 41.5 $10.5 $31.0 $34.5
712120 Historical Sites........ Factor......... 0.7 7.5 0.9 15.1 0.716 ........... 11.5 8.0
Size Std....... 7.5 7.5 11.0 $13.5 $13.5
712130 Zoos and Botanical Factor......... 5.3 52.7 10.7 17.5 0.778 ........... 25.0 30.0
Gardens. Size Std....... 26.0 9.0 41.5 $15.5 $24.5
712190 Nature Parks and Other Factor......... 1.5 19.2 1.8 26.1 0.748 ........... 17.0 8.0
Similar Institutions. Size Std....... 10.5 8.0 16.0 $22.5 $19.5
713110 Amusement and Theme Factor......... 34.9 2,658.3 29.1 72.1 0.877 ........... 41.5 41.5
Parks. Size Std....... 41.5 41.5 41.5 $41.5 $41.5
713120 Amusement Arcades....... Factor......... 0.7 7.4 0.5 9.5 0.658 ........... 8.0 8.0
Size Std....... 7.5 7.5 9.0 $9.5 $6.0
713210 Casinos (except Casino Factor......... 69.1 319.9 57.6 19.4 0.700 ........... 25.0 30.0
Hotels). Size Std....... 41.5 18.0 41.5 $17.0 $10.5
713290 Other Gambling Factor......... 5.0 191.4 4.5 21.3 0.815 ........... 25.0 35.0
Industries. Size Std....... 24.5 13.5 31.5 $18.5 $31.5
713910 Golf Courses and Country Factor......... 1.9 35.5 2.8 6.3 0.664 ........... 11.0 16.5
Clubs. Size Std....... 12.5 8.5 21.5 $6.5 $6.0
713920 Skiing Facilities....... Factor......... 6.5 160.1 7.2 39.6 0.792 ........... 31.0 30.0
Size Std....... 31.0 12.5 41.5 $33.0 $27.5
713930 Marinas................. Factor......... 1.1 7.3 1.8 5.7 0.612 ........... 9.5 8.0
Size Std....... 9.0 7.5 16.0 $6.5 $6.0
713940 Fitness and Recreational Factor......... 1.0 220.5 0.9 17.4 0.772 ........... 15.5 8.0
Sports Centers. Size Std....... 8.5 14.5 11.0 $15.5 $23.5
713950 Bowling Centers......... Factor......... 0.9 65.9 0.7 22.7 0.630 ........... 11.0 8.0
Size Std....... 8.0 9.5 10.0 $19.5 $6.0
713990 All Other Amusement and Factor......... 0.5 6.5 0.4 3.4 0.658 ........... 7.0 8.0
Recreation Industries. Size Std....... 7.0 7.5 8.5 $6.0 $6.0
721110 Hotels (except Casino Factor......... 3.5 1,805.2 7.0 19.7 0.792 7.4 30.5 35.0
Hotels) and Motels. Size Std....... 18.5 41.5 41.5 $17.5 $27.5 $35.0
721120 Casino Hotels........... Factor......... 241.7 2,353.8 241.7 34.3 0.708 ........... 31.0 35.0
Size Std....... 41.5 41.5 41.5 $28.5 $12.0
721191 Bed-and-Breakfast Inns.. Factor......... 0.4 1.4 0.2 3.9 0.558 ........... 6.5 8.0
Size Std....... 6.0 7.5 7.5 $6.0 $6.0
721199 All Other Traveler Factor......... 0.5 4.2 0.3 11.2 0.624 ........... 8.0 8.0
Accommodation. Size Std....... 6.5 7.5 7.5 $10.5 $6.0
721211 RV (Recreational Factor......... 0.6 10.3 0.9 10.4 0.613 ........... 9.0 38.0
Vehicle) Parks and Campgrounds. Size Std....... 7.0 7.5 11.5 $10.0 $6.0
721214 Recreational and Factor......... 0.9 5.1 1.0 5.5 0.624 ........... 8.0 8.0
Vacation Camps (except Size Std....... 8.5 7.5 12.0 $6.0 $6.0
Campgrounds).
721310 Rooming and Boarding Factor......... 0.7 22.8 2.3 21.0 0.639 ........... 12.5 8.0
Houses, Dormitories, and Size Std....... 7.5 8.0 18.5 $18.0 $6.0
Workers' Camps.
722310 Food Service Contractors Factor......... 12.2 4,854.8 3.4 66.6 0.882 11.5 38.0 41.5
Size Std....... 41.5 41.5 25.0 $41.5 $41.5 $41.5
722320 Caterers................ Factor......... 0.8 5.2 0.2 1.8 0.676 ........... 6.5 8.0
Size Std....... 7.5 7.5 7.0 $6.0 $6.0
722330 Mobile Food Services.... Factor......... 0.2 1.9 0.1 6.8 0.668 ........... 6.5 .8.0
Size Std....... 6.0 7.5 6.5 $7.0 $6.0
722410 Drinking Places Factor......... 0.5 6.6 0.2 2.5 0.598 ........... 6.5 8.0
(Alcoholic Beverages). Size Std....... 6.5 7.5 7.0 $6.0 $6.0
722511 Full-Service Restaurants Factor......... 1.1 562.0 0.3 7.9 0.668 ........... 10.0 8.0
Size Std....... 9.0 26.0 7.5 $8.0 $6.0
722513 Limited-Service Factor......... 1.3 293.4 0.4 6.2 0.731 ........... 11.0 12.0
Restaurants. Size Std....... 10.0 17.0 8.5 $6.5 $16.0
722514 Cafeterias, Grill Factor......... 1.4 208.6 0.4 29.5 0.731 ........... 15.5 30.0
Buffets, and Buffets. Size Std....... 10.0 14.5 8.5 $25.0 $16.5
722515 Snack and Nonalcoholic Factor......... 0.8 2,361.1 0.3 35.9 0.732 ........... 20.0 8.0
Beverage Bars. Size Std....... 8.0 41.5 8.0 $30.0 $16.5
811111 General Automotive Factor......... 0.5 8.3 0.1 2.0 0.540 -79.9 8.0 8.0
Repair. Size Std....... 7.0 7.5 7.0 $6.0 $6.0 $13.0
811112 Automotive Exhaust Factor......... 0.4 4.2 0.1 8.9 0.512 ........... 7.0 8.0
System Repair. Size Std....... 6.0 7.5 6.5 $8.5 $6.0
811113 Automotive Transmission Factor......... 0.5 3.6 0.1 5.0 0.488 ........... 6.5 8.0
Repair. Size Std....... 6.5 7.5 6.5 $6.0 $6.0
811118 Other Automotive Factor......... 0.5 8.5 0.2 10.6 0.589 ........... 7.5 8.0
Mechanical and Electrical Size Std....... 6.5 7.5 7.0 $10.0 $6.0
Repair and Maintenance.
811121 Automotive Body, Paint, Factor......... 0.9 21.6 0.2 4.5 0.617 ........... 7.0 8.0
and Interior Repair and Size Std....... 8.0 8.0 7.0 $6.0 $6.0
Maintenance.
811122 Automotive Glass Factor......... 0.7 333.2 0.3 35.5 0.701 ........... 15.5 12.0
Replacement Shops. Size Std....... 7.5 18.5 7.5 $29.5 $11.0
811191 Automotive Oil Change Factor......... 1.0 49.6 0.4 16.1 0.663 ........... 9.5 8.0
and Lubrication Shops. Size Std....... 8.5 9.0 8.5 $14.5 $6.0
811192 Car Washes.............. Factor......... 0.5 17.8 0.7 8.2 0.646 ........... 8.0 8.0
Size Std....... 7.0 8.0 10.0 $8.0 $6.0
811198 All Other Automotive Factor......... 0.5 17.0 0.2 17.5 0.666 ........... 9.0 8.0
Repair and Maintenance. Size Std....... 6.5 8.0 7.0 $15.5 $6.0
811211 Consumer Electronics Factor......... 1.0 191.4 0.4 50.4 0.802 ........... 22.5 8.0
Repair and Maintenance. Size Std....... 8.5 13.5 8.0 $41.5 $29.0
811212 Computer and Office Factor......... 1.0 50.5 0.4 14.1 0.790 15.8 17.5 30.0
Machine Repair and Maintenance. Size Std....... 8.5 9.0 8.0 $13.0 $27.0 $30.0
811213 Communication Equipment Factor......... 1.9 158.3 0.7 38.4 0.791 -27.9 19.5 12.0
Repair and Maintenance. Size Std....... 12.5 12.5 9.5 $32.0 $27.0 $15.5
811219 Other Electronic and Factor......... 2.3 265.7 0.8 35.1 0.795 -19.2 22.0 22.0
Precision Equipment Repair and Size Std....... 14.0 16.0 10.5 $29.5 $28.0 $26.5
Maintenance.
[[Page 76399]]
811310 Commercial and Factor......... 1.6 63.8 0.6 4.9 0.750 -10.7 11.0 8.0
Industrial Machinery and Size Std....... 11.0 9.5 9.5 $6.0 $19.5 $10.5
Equipment (except Automotive
and Electronic) Repair and
Maintenance.
811411 Home and Garden Factor......... 0.3 2.4 0.1 9.2 0.557 ........... 7.0 8.0
Equipment Repair and Size Std....... 6.0 7.5 6.5 $9.0 $6.0
Maintenance.
811412 Appliance Repair and Factor......... 0.5 137.5 0.2 31.6 0.670 ........... 12.5 16.5
Maintenance. Size Std....... 6.5 12.0 7.0 $26.5 $6.0
811420 Reupholstery and Factor......... 0.3 1.1 0.1 3.6 0.555 ........... 6.5 8.0
Furniture Repair. Size Std....... 6.0 7.5 6.5 $6.0 $6.0
811430 Footwear and Leather Factor......... 0.2 1.0 0.1 10.4 0.521 ........... 7.5 8.0
Goods Repair. Size Std....... 6.0 7.5 6.5 $10.0 $6.0
811490 Other Personal and Factor......... 0.3 2.4 0.1 2.9 0.607 ........... 6.5 8.0
Household Goods Repair and Size Std....... 6.0 7.5 6.5 $6.0 $6.0
Maintenance.
812111 Barber Shops............ Factor......... 0.2 7.3 0.0 15.6 0.612 ........... 8.5 8.0
Size Std....... 6.0 7.5 6.5 $14.0 $6.0
812112 Beauty Salons........... Factor......... 0.3 162.0 0.1 12.3 0.653 ........... 8.5 8.0
Size Std....... 6.0 12.5 6.5 $11.5 $6.0
812113 Nail Salons............. Factor......... 0.2 0.4 0.0 0.7 0.480 ........... 6.5 8.0
Size Std....... 6.0 7.5 6.5 $6.0 $6.0
812191 Diet and Weight Reducing Factor......... 1.5 355.8 0.4 61.1 0.814 ........... 24.0 22.0
Centers. Size Std....... 11.0 19.0 8.5 $41.5 $31.5
812199 Other Personal Care Factor......... 0.3 6.5 0.1 5.5 0.660 ........... 6.5 8.0
Services. Size Std....... 6.0 7.5 6.5 $6.0 $6.0
812210 Funeral Homes and Factor......... 1.1 205.9 0.9 15.7 0.550 ........... 11.0 8.0
Funeral Services. Size Std....... 9.5 14.0 11.0 $14.0 $6.0
812220 Cemeteries and Factor......... 0.8 121.2 1.2 30.1 0.786 ........... 18.5 22.0
Crematories. Size Std....... 8.0 11.5 12.5 $25.5 $26.0
812310 Coin-Operated Laundries Factor......... 0.4 87.4 0.2 28.5 0.626 ........... 11.5 8.0
and Drycleaners. Size Std....... 6.0 10.5 7.5 $24.0 $6.0
812320 Dry cleaning and Laundry Factor......... 0.4 2.7 0.2 1.5 0.564 -20.0 7.0 6.0
Services (except Coin- Size Std....... 6.0 7.5 7.0 $6.0 $6.0 $8.0
Operated).
812331 Linen Supply............ Factor......... 8.7 374.0 4.3 46.4 0.808 ........... 32.0 35.0
Size Std....... 39.5 20.0 30.0 $38.0 $30.0
812332 Industrial Launderers... Factor......... 16.8 1,478.3 9.3 72.2 0.839 32.8 40.5 41.5
Size Std....... 41.5 41.5 41.5 $41.5 $36.0 $41.5
812910 Pet Care (except Factor......... 0.2 2.3 0.1 3.8 0.575 ........... 6.5 8.0
Veterinary) Services. Size Std....... 6.0 7.5 6.5 $6.0 $6.0
812921 Photofinishing Factor......... 2.6 299.5 0.8 64.4 0.833 ........... 26.0 22.0
Laboratories (except One-Hour). Size Std....... 15.0 17.5 10.5 $41.5 $34.5
812922 One-Hour Photofinishing. Factor......... 0.3 10.2 0.1 50.1 0.690 ........... 16.0 16.5
Size Std....... 6.0 7.5 6.5 $41.0 $9.0
812930 Parking Lots and Garages Factor......... 2.6 211.8 1.6 29.2 0.811 9.7 25.5 41.5
Size Std....... 15.0 14.5 15.0 $24.5 $30.5 $41.5
812990 All Other Personal Factor......... 0.6 85.4 0.2 21.5 0.745 -56.8 13.0 8.0
Services. Size Std....... 7.0 10.0 7.0 $18.5 $19.0 $13.0
813110 Religious Organizations. Factor......... 0.7 59.2 2.3 3.2 0.706 ........... 11.5 8.0
Size Std....... 7.5 9.5 19.0 $6.0 $11.5
813211 Grantmaking Foundations. Factor......... 5.6 815.3 18.8 ........... 0.821 ........... 35.0 35.0
Size Std....... 27.5 34.5 41.5 $32.5
813212 Voluntary Health Factor......... 5.9 386.9 3.9 23.5 0.841 ........... 27.0 30.0
Organizations. Size Std....... 28.5 20.0 28.0 $20.0 $36.0
813219 Other Grantmaking and Factor......... 3.5 97.1 5.0 12.2 0.807 ........... 22.5 41.5
Giving Services. Size Std....... 19.0 10.5 34.0 $11.5 $30.0
813311 Human Rights Factor......... 2.7 352.9 3.4 35.1 0.822 -33.1 28.5 30.0
Organizations. Size Std....... 15.5 19.0 25.0 $29.5 $33.0 $37.5
813312 Environment, Factor......... 1.6 131.6 2.2 16.4 0.774 ........... 17.0 16.5
Conservation and Wildlife Size Std....... 11.0 11.5 18.5 $14.5 $24.0
Organizations.
813319 Other Social Advocacy Factor......... 1.4 92.8 1.4 17.5 0.776 ........... 16.0 8.0
Organizations. Size Std....... 10.0 10.5 13.5 $15.5 $24.5
813410 Civic and Social Factor......... 0.6 12.5 1.1 3.0 0.684 ........... 8.5 8.0
Organizations. Size Std....... 7.0 8.0 12.0 $6.0 $8.0
813910 Business Associations... Factor......... 1.5 46.1 1.5 5.1 0.772 ........... 13.5 8.0
Size Std....... 10.5 9.0 14.5 $6.0 $23.5
813920 Professional Factor......... 2.8 92.6 4.0 9.5 0.792 -39.7 20.5 16.5
Organizations. Size Std....... 16.0 10.5 28.5 $9.0 $27.5 $23.0
813930 Labor Unions and Similar Factor......... 1.2 41.2 1.5 5.1 0.797 ........... 14.5 8.0
Labor Organizations. Size Std....... 9.5 8.5 14.5 $6.0 $28.0
813940 Political Organizations. Factor......... 0.8 19.6 0.7 14.0 0.753 ........... 12.5 8.0
Size Std....... 8.0 8.0 10.0 $12.5 $20.0
813990 Other Similar Factor......... 1.1 103.8 1.1 10.6 0.729 ........... 12.0 8.0
Organizations (except Size Std....... 9.0 11.0 12.0 $10.0 $16.0
Business, Professional, Labor,
and Political Organizations).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Evaluation of Size Standards for Subindustry Categories or
``Exceptions''
In accordance with SBA's approach to evaluating size standards for
subindustry categories (or ``exceptions''), SBA has evaluated 1
exception covered by this rule using the procedures described in the
revised SBA's Methodology. The results of that analysis are discussed
in the following subsection.
Exception to NAICS 611519: Job Corps Centers
The current size standard for Federal contracts for Job Corps
Centers (exception to NAICS 611519, Other Technical and Trade Schools)
is $41.5 million in average annual receipts. For Federal procurement
programs, this size standard applies to Federal contracts that meet
specific criteria. The criteria required of a Jobs Corps Center
contract or SBA-recognized operator are detailed in Footnote 16 to
SBA's table of size standards (13 CFR 121.201): ``For
[[Page 76400]]
classifying a Federal procurement, the purpose of the solicitation must
be for the management and operation of a U.S. Department of Labor Job
Corps Center. The activities involved include admissions activities,
life skills training, educational activities, comprehensive career
preparation activities, career development activities, career
transition activities, as well as the management and support functions
and services needed to operate and maintain the facility. For SBA
assistance as a small business concern, other than for Federal
Government procurements, a concern must be primarily engaged in
providing the services to operate and maintain Federal Job Corps
Centers.''
As noted previously, the data from the Economic Census special
tabulation are limited to the 6-digit NAICS industry level and hence do
not provide data to assess economic characteristics at the sub-industry
level. For example, the Economic Census data for NAICS 611519 are
aggregates of both Other Technical and Trade Schools and the more
specialized establishments under the Job Corps exception. The lack of
relevant data at the sub-industry level is a challenge to determining
whether the size standard for the exception should be revised or left
unchanged. Thus, the results based on the Economic Census data alone
may not accurately reflect the characteristics of businesses providing
specialized services included under the exception.
To determine whether the Agency should propose revising the
exception under NAICS 611519, SBA analyzed data from the U.S.
Department of Labor (DOL) website which includes a listing of Job Corps
centers and their operators (available at https://www.dol.gov/agencies/eta/jobcorps/contact). SBA found that there were 23 non-governmental
operators listed on the DOL website. SBA also evaluated the data from
FPDS-NG and SAM. From FPDS-NG, SBA first identified firms that have a
principal NAICS code of 611519. SBA then identified Product and Service
Codes (PSCs) that correspond to the Job Corps Center exception by
filtering the data for contracts awarded to private firms providing job
corps services. SBA identified 7 PSCs from this search, namely: M1CZ--
Operation Of Other Educational Buildings, U006--Education/Training-
Vocational/Technical, M139--Operation of Govt Other Educational
Buildings, U099--Education/Training- Other, U009--Education/Training-
General, 7610--Books And Pamphlets and U008--Education/Training-
Training/Curriculum Development. Using this method, SBA identified 35
firms (including the firms listed on the DOL website) that had a
principal NAICS code of 611519 and were active in Federal contracting
involving the identified PSCs. For fiscal years 2016-2018, the total
average contract dollars obligated under these PSCs was $436.3 million.
However, since the additional 11 operators from FPDS-NG were not
included in the list of operators from the DOL website, SBA did not
include them in its analysis of industry and Federal procurement
factors for this NAICS exception. The average total contract dollars
obligated under the identified PSCs to the list of operators from only
the DOL website was $401.4 million, which represents 92% of the total
dollars obligated to Jobs Corps Centers. SBA's analysis did not include
firms that were considered outliers based on net de-obligations for
each year of the analysis period and those with extremely large
operating revenues.
The results from SBA's analysis are presented in Table 4 of this
proposed rule. The analysis supports decreasing the current size
standard to $37.0 million. However, for reasons discussed below in the
special considerations section, SBA proposes to retain the $41.5
million size standard.
Summary of Calculated Size Standards
Of the 144 industries and one subindustry (i.e. exception) reviewed
in this proposed rule, the results from analyses of the latest
available data on the 5 primary factors from Table 4, Size Standards
Supported by Each Factor for Each Industry (millions of dollars),
above, would support increasing size standards for 70 industries,
decreasing size standards for 63 industries, and maintaining size
standards for 12 industries. Table 5, Summary of Calculated Size
Standards, summarizes these results by NAICS sector.
Table 5--Summary of Calculated Size Standards
----------------------------------------------------------------------------------------------------------------
Number of Number of Number of Number of
NAICS sector Sector name size standards size standards size standards size standards
reviewed increased decreased unchanged
----------------------------------------------------------------------------------------------------------------
61............................ Education 18 14 4 0
Services.
62............................ Health Care and 39 18 18 3
Social
Assistance.
71............................ Arts, 25 11 11 3
Entertainment
and Recreation.
72............................ Accommodation 15 4 9 2
and Food
Services.
81............................ Other Services.. 48 23 21 4
---------------------------------------------------------------------------------
All Sectors............... ................ 145 70 63 12
----------------------------------------------------------------------------------------------------------------
Evaluation of SBA Loan Data
Before proposing or deciding on an industry's size standard
revision, SBA also considers the impact of size standards revisions on
SBA's loan programs. Accordingly, SBA examined its internal 7(a) and
504 loan data for fiscal years 2016-2018 to assess whether the
calculated size standards in Table 4 (above) need further adjustments
to ensure credit opportunities for small businesses through those
programs. For the industries reviewed in this rule, the data shows that
it is mostly businesses much smaller than the current or proposed size
standards that receive SBA's 7(a) and 504 loans. For example, for
industries covered by this rule, more than 99.3% of 7(a) and 504 loans
in fiscal years 2016-2018 went to businesses below the current or
proposed size standards.
Proposed Changes to Size Standards
Based on the analytical results in Table 4 and considerations of
impacts of calculated size standards in terms of access by currently
small businesses to SBA's loans, as discussed above, of a total of 145
industries or subindustries (exceptions) with receipts-based size
standards in Sectors 61, 62, 71, 72 and 81 that are covered by this
rule, and considering the current situation due to the COVID-19 related
national emergency and its impacts on small businesses and the overall
economy, SBA proposes to increase size standards for 70 industries, and
retain the current size standards for the remaining 75 industries.
[[Page 76401]]
Special Considerations
On March 13, 2020, the ongoing Coronavirus Disease 2019 (COVID-19)
was declared a pandemic of enough severity and magnitude to warrant an
emergency declaration for all states, territories, and the District of
Columbia. With the COVID-19 emergency, many small businesses nationwide
are experiencing economic hardship as a direct result of the Federal,
State, and local public health measures that are being taken to
minimize the public's exposure to the virus. These measures, some of
which are Government-mandated, are being implemented nationwide and
include the closures of restaurants, bars, and gyms. In addition, based
on the advice of public health officials, other measures, such as
keeping a safe distance from others or even stay-at-home orders, are
being implemented, resulting in a dramatic decrease in economic
activity as the public avoids malls, retail stores, and other
businesses.
The Coronavirus Aid, Relief, and Economic Security Act (the CARES
Act or the Act) (Pub. L. 116-136) was signed on March 27, 2020, to
provide emergency assistance and health care response for individuals,
families, and businesses affected by the coronavirus pandemic. Section
1102 of the Act temporarily permits SBA to guarantee 100% of 7(a) loans
under a new program titled the Paycheck Protection Program (PPP).
Section 1106 of the Act provides for forgiveness of up to the full
principal amount of qualifying loans guaranteed under the PPP. The PPP
and loan forgiveness are intended to provide economic relief to small
businesses nationwide adversely impacted under the COVID-19. On April
24, 2020, additional funding for the CARES Act, including for the PPP,
was provided.
The Agency is following closely the development of the pandemic and
the economic situation and recovery. The consequence of the initial
response of the public to the COVID-19 pandemic as well as the
different measures taken by the Government to contain it (e.g. stay at
home orders, social distancing, etc.) have resulted in the present
economic decline. A variety of economic indicators such as the Gross
Domestic Product (GDP) and the unemployment rate shows that this
recession is significantly worse than any other recession since World
War II. The GDP decreased nearly 5%, and the personal consumption in
goods and services decreased 6.9% in the first quarter of 2020. The
Bureau of Economic Analysis (BEA) third estimate for the second quarter
of 2020 shows that the GDP decreased 31.4%, and the personal
consumption in goods and services decreased 33.2%; In August 2020,
personal income decreased 2.7%, after having decreased by a lower
percentage in June (1.2%) and slightly increased in July 2020 (0.5%).
In September 2020, the unemployment rate declined to 7.9% from August
2020, when the unemployment rate was 8.4%. After reaching 14.7% in
April 2020, the unemployment rate has been decreasing from May to
September 2020, but still it is greater than in February 2020 when it
was 3.5%. For the month of September 2020, non-farm payroll increased
661,000 from August 2020, but the decrease in employment since February
2020 is about 10.5 million. Specifically, for the sectors evaluated in
this proposed rule, in September 2020 the unemployment rate for
Education and Health Services industries was 5.1%, the Leisure and
Hospitality industries showed an unemployment rate of 19.0% and the
Other Services sector, In September 2019, the unemployment rates for
these sectors were 2.2%, 4.8% and 3.2%, respectively. The latest
Federal Reserve Board's Monetary Policy Report shows that in general
the most impacted firms in these sectors are the small businesses.\1\
---------------------------------------------------------------------------
\1\ Board of Governors of the Federal Reserve System (June
2020), Monetary Policy Report, p. 24 (see https://www.federalreserve.gov/monetarypolicy/files/20200612_mprfullreport.pdf) and U.S. Census Bureau, see https://portal.census.gov/pulse/data. The latest is a recent survey created
by the Census Bureau to provide high-frequency, detailed information
on participation in small business-specific initiatives such as the
PPP.
---------------------------------------------------------------------------
Accordingly, in view of above impacts on small businesses from the
COVID-19 pandemic and Federal Government efforts to provide relief to
small businesses and support to the overall economy, SBA proposes to
adopt increases to size standards for 70 industries and retain the
current size standards for 63 industries for which analytical results
suggested their size standards could be lowered.
The proposed size standards are presented in Table 6, Proposed Size
Standards Revisions. Also presented in Table 6 are current and
calculated size standards for comparison.
Table 6--Proposed Size Standards Revisions
----------------------------------------------------------------------------------------------------------------
Calculated Proposed size Current size
NAICS code NAICS industry title size standard standard ($ standard ($
($ million) million) million)
----------------------------------------------------------------------------------------------------------------
611110............................ Elementary and Secondary $17.5 $17.5 $12.0
Schools.
611210............................ Junior Colleges............. 28.5 28.5 22.0
611310............................ Colleges, Universities, and 30.5 30.5 30.0
Professional Schools.
611410............................ Business and Secretarial 18.0 18.0 8.0
Schools.
611420............................ Computer Training........... 14.0 14.0 12.0
611430............................ Professional and Management 13.0 13.0 12.0
Development Training.
611511............................ Cosmetology and Barber 11.5 11.5 8.0
Schools.
611512............................ Flight Training............. 28.0 30.0 30.0
611513............................ Apprenticeship Training..... 10.0 10.0 8.0
611519............................ Other Technical and Trade 18.5 18.5 16.5
Schools.
Exception 611519.................. Job Corps Centers........... 37.0 41.5 41.5
611610............................ Fine Arts Schools........... 7.0 8.0 8.0
611620............................ Sports and Recreation 7.0 8.0 8.0
Instruction.
611630............................ Language Schools............ 18.0 18.0 12.0
611691............................ Exam Preparation and 11.0 11.0 8.0
Tutoring.
611692............................ Automobile Driving Schools.. 9.0 9.0 8.0
611699............................ All Other Miscellaneous 14.5 14.5 12.0
Schools and Instruction.
611710............................ Educational Support Services 21.0 21.0 16.5
621111............................ Offices of Physicians 14.0 14.0 12.0
(except Mental Health
Specialists).
621112............................ Offices of Physicians, 8.0 12.0 12.0
Mental Health Specialists.
[[Page 76402]]
621210............................ Offices of Dentists......... 7.5 8.0 8.0
621310............................ Offices of Chiropractors.... 6.5 8.0 8.0
621320............................ Offices of Optometrists..... 6.5 8.0 8.0
621330............................ Offices of Mental Health 7.0 8.0 8.0
Practitioners (except
Physicians).
621340............................ Offices of Physical, 11.0 11.0 8.0
Occupational and Speech
Therapists, and
Audiologists.
621391............................ Offices of Podiatrists...... 6.5 8.0 8.0
621399............................ Offices of All Other 9.0 9.0 8.0
Miscellaneous Health
Practitioners.
621410............................ Family Planning Centers..... 16.5 16.5 12.0
621420............................ Outpatient Mental Health and 14.0 16.5 16.5
Substance Abuse Centers.
621491............................ HMO Medical Centers......... 39.0 39.0 35.0
621492............................ Kidney Dialysis Centers..... 41.5 41.5 41.5
621493............................ Freestanding Ambulatory 15.5 16.5 16.5
Surgical and Emergency
Centers.
621498............................ All Other Outpatient Care 22.5 22.5 22.0
Centers.
621511............................ Medical Laboratories........ 36.5 36.5 35.0
621512............................ Diagnostic Imaging Centers.. 15.0 16.5 16.5
621610............................ Home Health Care Services... 16.5 16.5 16.5
621910............................ Ambulance Services.......... 20.0 20.0 16.5
621991............................ Blood and Organ Banks....... 34.5 35.0 35.0
621999............................ All Other Miscellaneous 18.0 18.0 16.5
Ambulatory Health Care
Services.
622110............................ General Medical and Surgical 30.0 41.5 41.5
Hospitals.
622210............................ Psychiatric and Substance 23.5 41.5 41.5
Abuse Hospitals.
622310............................ Specialty (except 30.0 41.5 41.5
Psychiatric and Substance
Abuse) Hospitals.
623110............................ Nursing Care Facilities 25.0 30.0 30.0
(Skilled Nursing
Facilities).
623210............................ Residential Intellectual and 15.5 16.5 16.5
Developmental Disability
Facilities.
623220............................ Residential Mental Health 15.0 16.5 16.5
and Substance Abuse
Facilities.
623311............................ Continuing Care Retirement 22.5 30.0 30.0
Communities.
623312............................ Assisted Living Facilities 20.5 20.5 12.0
for the Elderly.
623990............................ Other Residential Care 14.0 14.0 12.0
Facilities.
624110............................ Child and Youth Services.... 13.5 13.5 12.0
624120............................ Services for the Elderly and 13.0 13.0 12.0
Persons with Disabilities.
624190............................ Other Individual and Family 14.0 14.0 12.0
Services.
624210............................ Community Food Services..... 17.0 17.0 12.0
624221............................ Temporary Shelters.......... 11.5 12.0 12.0
624229............................ Other Community Housing 16.5 16.5 16.5
Services.
624230............................ Emergency and Other Relief 36.5 36.5 35.0
Services.
624310............................ Vocational Rehabilitation 13.0 13.0 12.0
Services.
624410............................ Child Day Care Services..... 8.5 8.5 8.0
711110............................ Theater Companies and Dinner 20.0 22.0 22.0
Theaters.
711120............................ Dance Companies............. 16.0 16.0 12.0
711130............................ Musical Groups and Artists.. 13.0 13.0 12.0
711190............................ Other Performing Arts 29.5 30.0 30.0
Companies.
711211............................ Sports Teams and Clubs...... 29.5 41.5 41.5
711212............................ Racetracks.................. 33.5 41.5 41.5
711219............................ Other Spectator Sports...... 14.5 14.5 12.0
711310............................ Promoters of Performing 23.5 35.0 35.0
Arts, Sports, and Similar
Events with Facilities.
711320............................ Promoters of Performing 19.5 19.5 16.5
Arts, Sports, and Similar
Events without Facilities.
711410............................ Agents and Managers for 15.5 15.5 12.0
Artists, Athletes,
Entertainers, and Other
Public Figures.
711510............................ Independent Artists, 8.0 8.0 8.0
Writers, and Performers.
712110............................ Museums..................... 25.5 30.0 30.0
712120............................ Historical Sites............ 11.5 11.5 8.0
712130............................ Zoos and Botanical Gardens.. 25.0 30.0 30.0
712190............................ Nature Parks and Other 17.0 17.0 8.0
Similar Institutions.
713110............................ Amusement and Theme Parks... 41.5 41.5 41.5
713120............................ Amusement Arcades........... 8.0 8.0 8.0
713210............................ Casinos (except Casino 25.0 30.0 30.0
Hotels).
713290............................ Other Gambling Industries... 25.0 35.0 35.0
713910............................ Golf Courses and Country 11.0 16.5 16.5
Clubs.
713920............................ Skiing Facilities........... 31.0 31.0 30.0
713930............................ Marinas..................... 9.5 9.5 8.0
713940............................ Fitness and Recreational 15.5 15.5 8.0
Sports Centers.
713950............................ Bowling Centers............. 11.0 11.0 8.0
713990............................ All Other Amusement and 7.0 8.0 8.0
Recreation Industries.
721110............................ Hotels (except Casino 30.5 35.0 35.0
Hotels) and Motels.
721120............................ Casino Hotels............... 31.0 35.0 35.0
721191............................ Bed-and-Breakfast Inns...... 6.5 8.0 8.0
721199............................ All Other Traveler 8.0 8.0 8.0
Accommodation.
[[Page 76403]]
721211............................ RV (Recreational Vehicle) 9.0 9.0 8.0
Parks and Campgrounds.
721214............................ Recreational and Vacation 8.0 8.0 8.0
Camps (except Campgrounds).
721310............................ Rooming and Boarding Houses, 12.5 12.5 8.0
Dormitories, and Workers'
Camps.
722310............................ Food Service Contractors.... 38.0 41.5 41.5
722320............................ Caterers.................... 6.5 8.0 8.0
722330............................ Mobile Food Services........ 6.5 8.0 8.0
722410............................ Drinking Places (Alcoholic 6.5 8.0 8.0
Beverages).
722511............................ Full-Service Restaurants.... 10.0 10.0 8.0
722513............................ Limited-Service Restaurants. 11.0 12.0 12.0
722514............................ Cafeterias, Grill Buffets, 15.5 30.0 30.0
and Buffets.
722515............................ Snack and Nonalcoholic 20.0 20.0 8.0
Beverage Bars.
811111............................ General Automotive Repair... 8.0 8.0 8.0
811112............................ Automotive Exhaust System 7.0 8.0 8.0
Repair.
811113............................ Automotive Transmission 6.5 8.0 8.0
Repair.
811118............................ Other Automotive Mechanical 7.5 8.0 8.0
and Electrical Repair and
Maintenance.
811121............................ Automotive Body, Paint, and 7.0 8.0 8.0
Interior Repair and
Maintenance.
811122............................ Automotive Glass Replacement 15.5 15.5 12.0
Shops.
811191............................ Automotive Oil Change and 9.5 9.5 8.0
Lubrication Shops.
811192............................ Car Washes.................. 8.0 8.0 8.0
811198............................ All Other Automotive Repair 9.0 9.0 8.0
and Maintenance.
811211............................ Consumer Electronics Repair 22.5 22.5 8.0
and Maintenance.
811212............................ Computer and Office Machine 17.5 30.0 30.0
Repair and Maintenance.
811213............................ Communication Equipment 19.5 19.5 12.0
Repair and Maintenance.
811219............................ Other Electronic and 22.0 22.0 22.0
Precision Equipment Repair
and Maintenance.
811310............................ Commercial and Industrial 11.0 11.0 8.0
Machinery and Equipment
(except Automotive and
Electronic) Repair and
Maintenance.
811411............................ Home and Garden Equipment 7.0 8.0 8.0
Repair and Maintenance.
811412............................ Appliance Repair and 12.5 16.5 16.5
Maintenance.
811420............................ Reupholstery and Furniture 6.5 8.0 8.0
Repair.
811430............................ Footwear and Leather Goods 7.5 8.0 8.0
Repair.
811490............................ Other Personal and Household 6.5 8.0 8.0
Goods Repair and
Maintenance.
812111............................ Barber Shops................ 8.5 8.5 8.0
812112............................ Beauty Salons............... 8.5 8.5 8.0
812113............................ Nail Salons................. 6.5 8.0 8.0
812191............................ Diet and Weight Reducing 24.0 24.0 22.0
Centers.
812199............................ Other Personal Care Services 6.5 8.0 8.0
812210............................ Funeral Homes and Funeral 11.0 11.0 8.0
Services.
812220............................ Cemeteries and Crematories.. 18.5 22.0 22.0
812310............................ Coin-Operated Laundries and 11.5 11.5 8.0
Drycleaners.
812320............................ Drycleaning and Laundry 7.0 7.0 6.0
Services (except Coin-
Operated).
812331............................ Linen Supply................ 32.0 35.0 35.0
812332............................ Industrial Launderers....... 40.5 41.5 41.5
812910............................ Pet Care (except Veterinary) 6.5 8.0 8.0
Services.
812921............................ Photofinishing Laboratories 26.0 26.0 22.0
(except One-Hour).
812922............................ One-Hour Photofinishing..... 16.0 16.5 16.5
812930............................ Parking Lots and Garages.... 25.5 41.5 41.5
812990............................ All Other Personal Services. 13.0 13.0 8.0
813110............................ Religious Organizations..... 11.5 11.5 8.0
813211............................ Grantmaking Foundations..... 35.0 35.0 35.0
813212............................ Voluntary Health 27.0 30.0 30.0
Organizations.
813219............................ Other Grantmaking and Giving 22.5 41.5 41.5
Services.
813311............................ Human Rights Organizations.. 28.5 30.0 30.0
813312............................ Environment, Conservation 17.0 17.0 16.5
and Wildlife Organizations.
813319............................ Other Social Advocacy 16.0 16.0 8.0
Organizations.
813410............................ Civic and Social 8.5 8.5 8.0
Organizations.
813910............................ Business Associations....... 13.5 13.5 8.0
813920............................ Professional Organizations.. 20.5 20.5 16.5
813930............................ Labor Unions and Similar 14.5 14.5 8.0
Labor Organizations.
813940............................ Political Organizations..... 12.5 12.5 8.0
813990............................ Other Similar Organizations 12.0 12.0 8.0
(except Business,
Professional, Labor, and
Political Organizations).
----------------------------------------------------------------------------------------------------------------
Table 7, Summary of Proposed Size Standards Revisions by Sector,
below, summarizes the proposed changes to size standards by NAICS
sector.
[[Page 76404]]
Table 7--Summary of Proposed Size Standards Revisions by Sector
----------------------------------------------------------------------------------------------------------------
Size standards Size standards Size standards
NAICS sector Sector name increased lowered maintained
----------------------------------------------------------------------------------------------------------------
61................................ Education Services.......... 14 0 4
62................................ Health Care and Social 18 0 21
Assistance.
71................................ Arts, Entertainment and 11 0 14
Recreation.
72................................ Accommodation and Food 4 0 11
Services.
81................................ Other Services.............. 23 0 25
-----------------------------------------------------------------------------
All Sectors................... ............................ 70 0 75
----------------------------------------------------------------------------------------------------------------
Evaluation of Dominance in Field of Operation
SBA has determined that for the industries which it has evaluated
in this proposed rule, no individual firm at or below the proposed size
standard would be large enough to dominate its field of operation. At
the proposed size standards levels, if adopted, the small business
share of total industry receipts among those industries would be, on
average, 0.63%, varying from 0.003% to 22.3%. These market shares
effectively preclude a firm at or below the proposed size standards
from exerting control on any of the industries.
Alternatives Considered
By law, SBA is required to develop numerical size standards for
establishing eligibility for Federal small business assistance programs
and to review every 5 years all size standards and make necessary
adjustments to reflect the current industry structure and Federal
market conditions. Other than varying the levels of size standards by
industry and changing the measures of size standards (e.g., using
annual receipts vs. the number of employees), no practical alternatives
exist to the systems of numerical size standards.
The proposal is to increase size standards where the data suggested
increases are warranted, and to retain, in response to COVID-19
emergency and resultant economic impacts on small businesses, all
current size standards where the data suggested lowering is
appropriate.
Nonetheless, SBA considered 2 other alternatives. Alternative
option one was to propose changes exactly as suggested by the
analytical results. Alternative option two was to retain all current
size standards.
Alternative option one would cause a substantial number of
currently small businesses to lose their small business status and
hence to lose their access to Federal small business assistance,
especially small business set-aside contracts and SBA's financial
assistance in some cases.
During the first 5-year review of size standards, some commenters
had expressed concerns about the SBA's policy of not lowering size
standards based on the analytical results. In response to these
comments, SBA considered as part of option one (i.e. to adopt changes
exactly as suggested by the analytical results) to mitigate the impact
of the decreases to size standards. The mitigation would provide
additional adjustments to the calculated sizes after evaluation of the
impact of the potential reductions on small business access to Federal
contracting and loans. However, due to the global COVID-19 pandemic
resulting in high levels of risk and dramatic reductions in economic
activity of unprecedented nature, SBA is not considering any mitigation
to decreases in size standards as part of option one. SBA will adopt
this approach temporarily and may reevaluate this approach as the
economic situation evolves. Under option two, given the current COVID-
19 pandemic, SBA considered retaining the current level of all size
standards even though the current analysis may suggest changing them.
SBA considers that the option of retaining all size standards at this
moment provides the opportunity to reassess the economic situation once
the economic recovery starts. Under this option, as the current
situation develops, SBA will be able to assess new data available on
economic indicators, federal procurement, and SBA loans as well, before
adopting changes to size standards. However, SBA is not adopting option
two because the Regulatory Impact Analysis shows that retaining all
size standards at their current levels is more onerous for the small
businesses than the option of adopting 70 increases and retaining 75
size standards. SBA may reevaluate this approach as the current
economic situation evolves.
Request for Comments
SBA invites public comments on this proposed rule, especially on
the following issues:
1. SBA seeks feedback on whether SBA's proposal to increase 70 size
standards and retain 75 size standards is appropriate given the results
from the latest available industry and Federal contracting data of each
industry and subindustry (exception) reviewed in this proposed rule,
along with ongoing uncertainty and dramatic contraction in economic
activity due to the global COVID-19 pandemic. SBA also seeks
suggestions, along with supporting facts and analysis, for alternative
size standards, if they would be more appropriate than the proposed
size standards.
2. SBA also seeks comments on whether SBA should not lower any size
standards in view of the COVID-19 pandemic and its adverse impacts on
small businesses as well as on the overall economic situation when
analytical results suggest some size standards could be lowered. SBA
believes that lowering size standards under the current economic
environment would run counter to what Congress and Federal Government
are doing to aid and provide relief to the nation's small businesses
impacted by the COVID-19 pandemic.
3. Given the uncertainty produced by the global COVID-19 pandemic
and the economic consequences, SBA would like to receive comments from
the public on the possibility of lowering size standards while
mitigating the consequences of the lower standards, instead of not
lowering any size standards.
4. In calculating the overall industry size standard, SBA has
assigned equal weight to each of the 5 primary factors in all
industries and subindustries covered by this proposed rule. SBA seeks
feedback on whether it should assign equal weight to each factor or on
whether it should give more weight to one or more factors for certain
industries or subindustries. Recommendations to weigh some factors
differently than others should include suggested weights for each
factor along with supporting facts and analysis.
[[Page 76405]]
5. Finally, SBA seeks comments on data sources it used to examine
industry and Federal market conditions, as well as suggestions on
relevant alternative data sources that the Agency should evaluate in
reviewing or modifying size standards for industries covered by this
proposed rule.
Public comments on the above issues are very valuable to SBA for
validating its proposed size standards revisions in this proposed rule.
Commenters addressing size standards for a specific industry or a group
of industries should include relevant data and/or other information
supporting their comments. If comments relate to the application of
size standards for Federal procurement programs, SBA suggests that
commenters provide information on the size of contracts in their
industries, the size of businesses that can undertake the contracts,
start-up costs, equipment and other asset requirements, the amount of
subcontracting, other direct and indirect costs associated with the
contracts, the use of mandatory sources of supply for products and
services, and the degree to which contractors can mark up those costs.
Compliance With Executive Orders 12866 and 13771, the Regulatory
Flexibility Act (5 U.S.C. 601-612), Executive Orders 13563, 12988, and
13132, and the Paperwork Reduction Act (44 U.S.C. Ch. 35)
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
proposed rule is a significant regulatory action for purposes of
Executive Order 12866. Accordingly, in the next section SBA provides a
Regulatory Impact Analysis of this proposed rule, including: (1) A
statement of the need for the proposed action, (2) an examination of
alternative approaches, and (3) an evaluation of the benefits and
costs--both quantitative and qualitative--of the proposed action and
the alternatives considered. However, this rule is not a ``major rule''
under the Congressional Review Act, 5 U.S.C. 800.
Regulatory Impact Analysis
1. What is a need for this regulatory action?
Under the Small Business Act (Act) (15 U.S.C. 632(a)), SBA's
Administrator is responsible for establishing small business size
definitions (or ``size standards'') and ensuring that such definitions
vary from industry to industry to reflect differences among various
industries. The Jobs Act requires SBA to review every 5 years all size
standards and make necessary adjustments to reflect current industry
and Federal market conditions. This proposed rule is part of the second
5-year review of size standards in accordance with the Jobs Act. The
first 5-year review of size standards was completed in early 2016. Such
periodic reviews of size standards provide SBA with an opportunity to
incorporate ongoing changes to industry structure and Federal market
environment into size standards and to evaluate the impacts of prior
revisions to size standards on small businesses. This also provides SBA
with an opportunity to seek and incorporate public input to the size
standards review and analysis. SBA believes that proposed size
standards revisions for industries being reviewed in this rule will
make size standards more reflective of the current economic
characteristics of businesses in those industries and the latest trends
in Federal marketplace.
SBA's mission is to aid and assist small businesses through a
variety of financial, procurement, business development and counseling,
and disaster assistance programs. To determine the actual intended
beneficiaries of these programs, SBA establishes numerical size
standards by industry to identify businesses that are deemed small.
The proposed revisions to the existing size standards for 70
industries in NAICS Sectors 61, 62, 71, 72 and 81 are consistent with
SBA's statutory mandates to help small businesses grow and create jobs
and to review and adjust size standards every 5 years. This regulatory
action promotes the Administration's goals and objectives as well as
meets the SBA's statutory responsibility. One of SBA's goals in support
of promoting the Administration's objectives is to help small
businesses succeed through fair and equitable access to capital and
credit, Federal Government contracts and purchases, and management and
technical assistance. Reviewing and modifying size standards, when
appropriate, ensures that intended beneficiaries are able to access
Federal small business programs that are designed to assist them to
become competitive and create jobs.
2. What are the potential benefits and costs of this regulatory action?
OMB directs agencies to establish an appropriate baseline to
evaluate any benefits, costs, or transfer impacts of regulatory actions
and alternative approaches considered. The baseline should represent
the agency's best assessment of what the world would look like absent
the regulatory action. For a new regulatory action promulgating
modifications to an existing regulation (such as modifying the existing
size standards), a baseline assuming no change to the regulation (i.e.,
making no changes to current size standards) generally provides an
appropriate benchmark for evaluating benefits, costs, or transfer
impacts of proposed regulatory changes and their alternatives.
Proposed Changes to Size Standards
Based on the results from analyses of latest industry and Federal
contracting data, as well as consideration of impact of size standards
changes on small businesses and significant adverse impacts of the
COVID-19 pandemic on small businesses and the overall economic
activity, of the total of 145 industries in Sectors 61, 62, 71, 72 and
81 that have receipts-based size standards, SBA proposes to increase
size standards for 70 industries, and maintain current size standards
for the remaining 75 industries.
The Baseline
For purposes of this regulatory action, the baseline represents
maintaining the ``status quo,'' i.e., making no changes to the current
size standards. Using the number of small businesses and levels of
benefits (such as set-aside contracts, SBA's loans, disaster
assistance, etc.) they receive under the current size standards as a
baseline, one can examine the potential benefits, costs and transfer
impacts of proposed changes to size standards on small businesses and
on the overall economy.
Based on the 2012 Economic Census (the latest available), of a
total of about 2.0 million businesses in industries in Sectors 61, 62,
71, 72, and 81, 98% are considered small under the current size
standards. That percentage varies from 95.9% in Sector 61 to 98.8% in
Sectors 72 and 81. Based on the data from FPDS-NG for fiscal years
2016-2018, about 26,174 unique firms in those industries received at
least one Federal contract during that period, of which 78.2% were
small under the current size standards. A total of $15.2 billion in
average annual contract dollars were awarded to businesses in those
industries during the period of evaluation, and 30.7% of the dollars
awarded went to small businesses. For these sectors, providing contract
dollars to small business through set-asides is quite important. From
the total small business contract dollars awarded during the period
considered, 65.0% were awarded through various small business set-aside
programs and 35.0% were awarded through non-set aside
[[Page 76406]]
contracts. Based on the SBA's internal data on its loan programs for
fiscal years 2016-2018, small businesses in those industries received,
on an annual basis, a total of 25,070 7(a) and 504 loans in that
period, totaling about $12.9 billion, of which 83.2% was issued through
the 7(a) program and 16.8% was issued through the 504/CDC program.
During fiscal years 2016-2018, small businesses in those industries
also received 1,612 loans through the SBA's Economic Injury Disaster
Loan (EIDL) program, totaling about $186 million on an annual basis.
Table 8, Baseline for All Industries, below, provides these baseline
results by sector.
Table 8--Baseline for All Industries
----------------------------------------------------------------------------------------------------------------
Sector 61 Sector 62 Sector 71 Sector 72 Sector 81 Total
----------------------------------------------------------------------------------------------------------------
Baseline All Industries (current 18 39 25 15 48 145
size standards)..................
Total firms (Economic Census)..... 84,084 653,143 114,926 496,856 667,318 2,016,327
Total small firms under current 80,620 632,077 112,612 490,773 659,559 1,975,640
size standards (Economic Census).
Small firms as % of total firms... 95.9 96.8 98.0 98.8 98.8 98.0
Total contract dollars ($ million) $3,548.9 $8,474.5 $157.4 $785.2 $2,848.9 $15,814.9
(FPDS-NG FY2016-2018)............
Total small business contract $1,257.0 $2,335.5 $114.7 $356.9 $784.6 $4,848.7
dollars under current standards
($ million) (FPDS-NG FY2016-2018)
Small business dollars as % of 35.4 27.6 72.9 45.5 27.5 30.7
total dollars (FPDS-NG FY2016-
2018)............................
Total No. of unique firms getting 4,425 6,853 1,128 3,733 10,786 26,174
contracts (FPDS-NG FY2016-2018)..
Total No. of unique small firms 3,514 5,758 1,023 3,088 7,476 20,475
getting small business contracts
(FPDS-NG FY2016-2018)............
Small business firms as % of total 79.4 84.0 90.7 82.7 69.3 78.2
firms............................
No. of 7(a) and 504/CDC loans 993 6,251 2,280 9,313 6,233 25,070
(FY2016-2018)....................
Amount of 7(a) and 504 loans ($ $371.8 $3,324.0 $1,104.6 $5,826.6 $2,301.6 $12,928.7
million) (FY2016-2018)...........
No. of EIDL loans (FY2016-2018)... 68 376 140 382 646 1,612
Amount of EIDL loans ($ million) $6.1 $41.7 $17.8 $48.7 $72.0 $186.4
(FY2016-2018)....................
----------------------------------------------------------------------------------------------------------------
Increases to Size Standards
As stated above, of 145 receipts-based size standards in Sectors
61, 62, 71, 72 and 81 that are reviewed in this rule, based on the
results from analyses of latest industry and Federal market data as
well as impacts of size standards changes on small businesses, in this
rule, SBA proposes to increase 70 size standards. Below are
descriptions of the benefits, costs and transfer impacts of these
proposed increases to size standards.
Benefits of Increases to Size Standards
The most significant benefit to businesses from proposed increases
to size standards is gaining eligibility for Federal small business
assistance programs or retaining that eligibility for a longer period.
These include SBA's business loan programs, EIDL program, and Federal
procurement programs intended for small businesses. Federal procurement
programs provide targeted, set-aside opportunities for small businesses
under the SBA's various business development and contracting programs.
These include the 8(a)/BD (business development) Program, the Small
Disadvantaged Businesses (SDB) Program, the Historically Underutilized
Business Zones (HUBZone) Program, the Women-Owned Small Businesses
(WOSB) Program, the Economically Disadvantaged Women-Owned Small
Businesses (EDWOSB) Program, and the Service-Disabled Veteran-Owned
Small Businesses (SDVOSB) Program.
Besides set-aside contracting and financial assistance discussed
above, small businesses also benefit through reduced fees, less
paperwork, and fewer compliance requirements that are available to
small businesses through the Federal Government. However, SBA has no
data to estimate the number of small businesses receiving such
benefits.
Based on the 2012 Economic Census (latest available), SBA estimates
that in 70 industries in NAICS Sectors 61, 62, 71, 72 and 81 for which
it has proposed to increase size standards, more than 4,708 firms (see
Table 9, below), not small under the current size standards, will
become small under the proposed size standards increases and therefore
become eligible for these programs. That represents about 0.4% of all
firms classified as small under the current size standards in
industries for which SBA has proposed increasing size standards. If
adopted, proposed size standards would result in an increase to the
small business share of total receipts in those industries from 37.4%
to 38.5%.
With more businesses qualifying as small under the proposed
increases to size standards, Federal agencies will have a larger pool
of small businesses from which to draw for their small business
procurement programs. Growing small businesses that are close to
exceeding the current size standards will be able to retain their small
business status for a longer period under the higher size standards,
thereby enabling them to continue to benefit from the small business
programs.
Based on the FPDS-NG data for fiscal years 2016-2018, SBA estimates
that about 233 firms that are active in Federal contracting in those
industries would gain small business status under the proposed size
standards. Based on the same data, SBA estimates that those newly-
qualified small businesses under the proposed increases to size
standards, if adopted, could receive Federal small business contracts
totaling about $47.0 million annually. That represents a 1.9% increase
to small business dollars from the sector baseline.
The added competition from more businesses qualifying as small can
result in lower prices to the Government for procurements set aside or
reserved for small businesses, but SBA cannot quantify this impact.
Costs could be higher when full and open contracts are awarded to
HUBZone businesses that receive price evaluation preferences. However,
with agencies likely setting aside more contracts for small businesses
in response to the availability of a larger pool of small
[[Page 76407]]
businesses under the proposed increases to size standards, HUBZone
firms might actually end up getting more set-aside contracts and fewer
full and open contracts, thereby resulting in some cost savings to
agencies. While SBA cannot estimate such costs savings as it is
impossible to determine the number and value of unrestricted contracts
to be otherwise awarded to HUBZone firms will be awarded as set-asides,
such cost savings are likely to be relatively small as only a small
fraction of full and open contracts are awarded to HUBZone businesses.
Under SBA's 7(a) and 504 loan programs, based on the data for
fiscal years 2016-2018, SBA estimates up to about 54 of SBA's 7(a) and
504 loans totaling about $23.0 million could be made to these newly-
qualified small businesses in those industries under the proposed size
standards. That represents a 0.4% increase to the loan amount compared
to the baseline for all industries covered by this proposed rule.
Newly-qualified small businesses will also benefit from the SBA's
EIDL program. Since the benefit provided through this program is
contingent on the occurrence and severity of a disaster in the future,
SBA cannot make a meaningful estimate of this impact. However, based on
the historical trends of the EIDL data, SBA estimates that, on an
annual basis, the newly defined small businesses under the proposed
increases to size standards, if adopted, could receive six (6) EIDL
loans, totaling about $0.7 million. Additionally, the newly-defined
small businesses would also benefit through reduced fees, less
paperwork, and fewer compliance requirements that are available to
small businesses through the Federal Government, but SBA has no data to
quantify this impact. Table 9, Impacts of Proposed Increases to Size
Standards, provides these results by NAICS sector.
Table 9--Impacts of Proposed Increases to Size Standards
----------------------------------------------------------------------------------------------------------------
Sector 61 Sector 62 Sector 71 Sector 72 Sector 81 Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed 14 18 11 4 23 70
increases to size standards......
Total current small businesses in 53,788 350,287 47,893 243,299 428,410 1,123,676
industries with Proposed
increases to size standards
(Economic Census 2012)...........
Additional firms qualifying as 707.9 1464.4 264.9 599.3 1671.3 4,708
small under proposed standards
(2012 Economic Census)...........
Percentage of additional firms 1.32 0.42 0.55 0.25 0.39 0.42
qualifying as small relative to
current small businesses in
industries with proposed
increases to size standards......
No. of current unique small firms 3,365 3,482 395 722 3,300 11,080
getting small business contracts
in industries with proposed
increases to size standards (FPDS-
NG FY2016-2018) \1\..............
Additional small business firms 33 30 8 1 168 233
getting small business status
(FPDS-NG FY2016-2018)............
% increase to small businesses 0.98 0.86 2.03 0.14 5.09 2.10
relative to current unique small
firms getting small business
contracts in industries with
proposed increases to size
standards (FPDS-NG FY2016-2018)
\1\..............................
Total small business contract $1,091.7 $1,094.3 $26.6 $12.4 $233.0 $2,458.0
dollars under current standards
in industries with proposed
increases to size standards ($
million) (FPDS-NG FY2016-2018)...
Estimated small business dollars $19.4 $14.8 $0.9 $0.0 $11.8 $47.0
available to newly-qualified
small firms (Using avg dollars
obligated to SBs) ($ million)
FPDS-NG FY 2016-2018) \1\........
% increase to small business 1.78 1.35 3.28 0.31 5.08 1.91
dollars relative to total small
business contract dollars under
current standards in industries
with proposed increases to size
standards........................
Total no. of 7(a) and 504 loans to 565 3,209 1,502 4,437 2,856 12,569
small business in industries with
proposed increases to size
standards (FY2016-2018)..........
Total amount of 7(a) and 504 loans $208.0 $1,827.2 $652.6 $1,688.3 $943.1 $5,319.3
to small businesses in industries
with proposed increases to size
standards ($ million) (FY2016-
2018)............................
Estimated no. of 7(a) and 504 8 14 9 11 12 54
loans to newly-qualified small
firms............................
Estimated 7(a) and 504 loan amount $2.9 $8.0 $3.9 $4.2 $4.0 $23.0
to newly-qualified small firms ($
million).........................
% increase to 7(a) and 504 loan 1.4% 0.4% 0.6% 0.2% 0.4% 0.4%
amount relative to the total
amount of 7(a) and 504 loans in
industries with proposed
increases to size standards......
Total no. of EIDL loans to small 49 213 51 197 423 933
businesses in industries with
proposed increases to size
standards (FY2016-2018)..........
Total amount of EIDL loans to $5.0 $20.8 $6.2 $23.8 $56.9 $112.7
small businesses in industries
with proposed increases to size
standards ($ million) (FY2016-
2018)............................
Estimated no. of EIDL loans to 1 1 1 1 2 6
newly-qualified small firms......
Estimated EIDL loan amount to $0.10 $0.10 $0.12 $0.12 $0.27 $0.71
newly-qualified small firms ($
million).........................
[[Page 76408]]
% increase to EIDL loan amount 2.0% 0.5% 2.0% 0.5% 0.5% 0.6%
relative to the total amount of
EIDL loans in industries with
proposed increases to size
standards........................
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
in number of firms. Numbers of firms are calculated using the SBA current size standard, not the contracting
officer's size designation.
\2\ Total impact represents total unique number of firms impacted to avoid double counting as some firms are
participating in more than one industry.
Costs of Increases to Size Standards
Besides having to register in SAM to be able to participate in
Federal contracting and update the SAM profile annually,\2\ small
businesses incur no direct costs to gain or retain their small business
status as a result of increases to size standards. All businesses
willing to do business with Federal Government must register in SAM and
update their SAM profiles annually, regardless of their size status.
SBA believes that a vast majority of businesses that are willing to
participate in Federal contracting are already registered in SAM and
update their SAM profiles annually. More importantly, this proposed
rule does not establish the new size standards for the very first time;
rather it intends to modify the existing size standards in accordance
with a statutory requirement and the latest data and other relevant
factors.
---------------------------------------------------------------------------
\2\ For a clarification of what the FAR's annual representation
in SAM requirement is, see number 3 under the Initial Regulatory
Flexibility Analysis section on page 92.
---------------------------------------------------------------------------
To the extent that the newly-qualified small businesses could
become active in Federal procurement, the proposed increases to size
standards, if adopted, may entail some additional administrative costs
to the Government as a result of more businesses qualifying as small
for Federal small business programs. For example, there will be more
firms seeking SBA's loans, more firms eligible for enrollment in the
Dynamic Small Business Search (DSBS) database or in certify.sba.gov,
more firms seeking certification as 8(a)/BD or HUBZone firms or
qualifying for small business, SDB, WOSB, EDWOSB, and SDVOSB status,
and more firms applying for SBA's 8(a)/BD and all small business
mentor-prot[eacute]g[eacute] programs. With an expanded pool of small
businesses, it is likely that Federal agencies would set aside more
contracts for small businesses under the proposed increases to size
standards. One may surmise that this might result in a higher number of
small business size protests and additional processing costs to
agencies. However, the SBA's historical data on size protests shows
that the number of size protests decreased following the increases to
receipts-based size standards as part of the first 5-year review of
size standards. Specifically, on an annual basis, the number of size
protests fell from about 600 during fiscal years 2011-2013 (review of
most receipts-based size standards was completed by the end of FY
2013), as compared to about 500 during fiscal years 2014-2016 when size
standards increases were in effect. That represents a 17% decline.
Among those newly-defined small businesses seeking SBA's loans, there
could be some additional costs associated with verification of their
small business status. However, small business lenders have an option
of using the tangible net worth and net income based alternative size
standard instead of using the industry-based size standards to
establish eligibility for SBA's loans. For these reasons, SBA believes
that these added administrative costs will be minor because necessary
mechanisms are already in place to handle these added requirements.
Additionally, some Federal contracts may possibly have higher
costs. With a greater number of businesses defined as small due to the
proposed increases to size standards, Federal agencies may choose to
set aside more contracts for competition among small businesses only
instead of using a full and open competition. The movement of contracts
from unrestricted competition to small business set-aside contracts
might result in competition among fewer total bidders, although there
will be more small businesses eligible to submit offers under the
proposed size standards. However, the additional costs associated with
fewer bidders are expected to be minor since, by law, procurements may
be set aside for small businesses under the 8(a)/BD, SDB, HUBZone,
WOSB, EDWOSB, or SDVOSB programs only if awards are expected to be made
at fair and reasonable prices.
Costs may also be higher when full and open contracts are awarded
to HUBZone businesses that receive price evaluation preferences.
However, with agencies likely setting aside more contracts for small
businesses in response to the availability of a larger pool of small
businesses under the proposed increases to size standards, HUBZone
firms might actually end up getting fewer full and open contracts,
thereby resulting in some cost savings to agencies. However, such cost
savings are likely to be minimal as only a small fraction of
unrestricted contracts are awarded to HUBZone businesses.
Transfer Impacts of Increases to Size Standards
The proposed increases to size standards, if adopted, may result in
some redistribution of Federal contracts between the newly qualified
small businesses and large businesses and between the newly-qualified
small businesses and small businesses under the current standards.
However, it would have no impact on the overall economic activity since
total Federal contract dollars available for businesses to compete for
will not change with changes to size standards. While SBA cannot
quantify with certainty the actual outcome of the gains and losses from
the redistribution of contracts among different groups of businesses,
it can identify several probable impacts in qualitative terms. With the
availability of a larger pool of small businesses under the proposed
increases to size standards, some unrestricted Federal contracts which
would otherwise be awarded to large businesses may be set aside for
small businesses. As a result, large businesses may lose some Federal
contracting opportunities. Similarly, some small businesses under the
current size standards may obtain fewer set-aside contracts due to the
increased competition from larger businesses qualifying as small under
the proposed increases to size standards. This impact may be offset by
a greater number of procurements being set aside for all small
businesses. With larger businesses qualifying as small under the higher
size standards, smaller small businesses could face some disadvantage
in competing for set aside contracts against their larger counterparts.
However, SBA cannot quantify these impacts.
[[Page 76409]]
3. What alternatives have been considered?
Under OMB Circular A-4, SBA is required to consider regulatory
alternatives to the proposed changes in the proposed rule. In this
section, SBA describes and analyzes 2 such alternatives to the proposed
rule. Alternative Option One to the proposed rule, a more stringent
alternative to the proposed rule, would propose adopting size standards
based solely on the analytical results. In other words, the size
standards of 70 industries for which the analytical results suggest
raising size standards would be raised. However, the size standards of
63 industries for which the analytical results suggest lowering size
standards would be maintained. Alternative Option Two would propose
retaining all size standards for all industries, given the uncertainty
generated by the ongoing COVID-19 pandemic. Below, SBA discusses and
presents the net impacts of each option.
Alternative Option One: Consider Adopting All Calculated Size Standards
As discussed elsewhere in this proposed rule, Alternative Option
One would cause a substantial number of currently small businesses to
lose their small business status and hence to lose their access to
Federal small business assistance, especially small business set-aside
contracts and SBA's financial assistance in some cases. SBA could adopt
one or more of the following three actions with respect to adopting
size standards for which the analytical results suggest a decrease is
appropriate: (1) To accept decreases in size standards as suggested by
the analytical results, (2) to decrease size standards by a smaller
amount than the calculated threshold, and (3) to retain the size
standards at their current levels. Actions 2 and 3 would mitigate the
impacts of a decrease to size standards.
SBA has adopted action 3 in previous size reviews. For example, in
response to the 2008 Financial Crisis and economic conditions that
followed, SBA adopted a general policy in the first 5-year
comprehensive size standards review to not lower any size standard
(except to exclude one or more dominant firms) even when the analytical
results suggested the size standard should be lowered. Currently,
because of the economic challenges presented by the COVID-19 pandemic
and the measures taken to protect public health, SBA has decided to
adopt same general policy of not lowering size standards in the ongoing
second 5-year comprehensive size standards review as well.
The primary benefit of adopting all changes in size standards as
suggested by the analytical results is that SBA's procurement,
management, technical and financial assistance resources would be
targeted to the most appropriate beneficiaries of such programs
according to the analytical results. Adopting the size standards
suggested by the analytical results would also promote consistency with
analytical results in SBA's exercise of its authority to determine size
standards. SBA seeks public comment on the impact of adopting the size
standard as suggested by the analytical results.
We have discussed already the benefits and costs of increasing 70
size standards. Below we discuss the benefits and costs of decreasing
63 size standards.
Benefits of Decreases to Size Standards
The most significant benefit to businesses from decreases to size
standards when the SBA's analysis suggests such decreases is to ensure
that size standards are more reflective of latest industry structure
and Federal market trends and that Federal small business assistance is
more effectively targeted to its intended beneficiaries. These include
SBA's loan programs, EIDL program, and Federal procurement programs
intended for small businesses. Federal procurement programs provide
targeted, set-aside opportunities for small businesses under SBA's
business development programs, such as small business, 8(a)/BD, SDB
HUBZone, WOSB, EDWOSB, and SDVOSB programs. The adoption of smaller
size standards when the results support them diminishes the risk of
awarding contracts to firms which are not small anymore.
Decreasing size standards may reduce the administrative costs of
the Government, because the risk of awarding contracts to other than
small businesses may diminish when the size standards reflect better
the structure of the market. The risks of providing SBA's loans to
firms that are not needing them the most, or allowing firms that are
not eligible for small business set-asides or to participate on the SBA
procurement programs will provide for a better chance for smaller firms
to grow and benefit from the opportunities available in the Federal
market, and strengthen the small business industrial base for the
Federal Government.
Costs of Decreases to Size Standards
With fewer businesses qualifying as small under the decreases to
size standards, Federal agencies will have a smaller pool of small
businesses from which to draw for their small business procurement
programs. For example, in Option One, during fiscal years 2016-2018,
agencies awarded, on an annual basis, about $2,004 million in small
business contracts in those 63 industries for which this Option
considered decreasing size standards. Table 10 below shows that
lowering 63 size standards would reduce Federal contract dollars
awarded to small businesses by $76.4 million or about 3.8% relative to
the baseline level. Nevertheless, since Federal agencies are still
required to meet the statutory small business contracting goal of 23%,
actual impacts on the overall set aside activity is likely to be
smaller as agencies are likely to award more set aside contracts to
small businesses that continue to remain small under the reduced size
standards.
With fewer businesses qualifying as small, the decreased
competition can also result in higher prices to the Government for
procurements set aside or reserved for small businesses, but SBA cannot
quantify this impact. However, SBA estimates an almost null impact or
non-significant reduction in dollars obligated to small businesses, if
mitigation measures are adopted. Decreases to size standards would have
a very minor impact on small businesses applying for SBA's 7(a) and 504
loans because a vast majority of such loans are issued to businesses
that are far below the reduced size standards. For example, based on
the loan data for fiscal years 2016-2018, Option One estimates that
about 26 SBA's 7(a) and 504 loans with total amounts of $19.8 million
could not be made to those small businesses that would lose eligibility
under the reduced size standards (before mitigation). That represents
about a 0.3% decrease of the loan amounts compared to the baseline.
Table 10 Impacts of Decreases to Size Standards Under Alternative
Option One, below, shows these results by sector. However, the actual
impact could be much less as businesses losing small business
eligibility under the decreases to industry-based size standards could
still qualify for SBA's loans under the tangible net worth and net
income-based alternative size standard.
Businesses losing small business status would also be impacted in
terms of access to loans through the SBA's EIDL program. However, SBA
expects such impact to be minimal as only a small number of businesses
in those industries received such loans during fiscal years 2016-2018.
Since this
[[Page 76410]]
program is contingent on the occurrence and severity of a disaster in
the future, SBA cannot make a meaningful estimate of this impact.
Small businesses becoming other than small if size standards were
decreased might lose benefits through reduced fees, less paperwork, and
fewer compliance requirements that are available to small businesses
through Federal Government, but SBA has no data to quantify this
impact. However, if agencies determine that SBA's size standards do not
adequately serve such purposes, they can establish a different size
standard with an approval from SBA if they are required to use SBA's
size standards for their programs.
Table 10--Impacts of Decreases to Size Standards Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
Sector 61 Sector 62 Sector 71 Sector 72 Sector 81 Total
----------------------------------------------------------------------------------------------------------------
No. of industries for which SBA 4 18 11 9 21 63
considered decreasing size
standards (2012 Economic Census).
Total current small businesses in 26,832 257,179 39,737 243,637 129,388 696,774
industries for which SBA
considered decreasing size
standards (EC 2012)..............
Estimated no. of firms losing 21 828 259 399 211 1,718
small status for which SBA
considered decreasing size
standards (2012 Economic Census).
% of Firms losing small status 0.08 0.32 0.65 0.16 0.16 0.25
relative to current small
businesses in industries for
which SBA considered decreasing
size standards...................
No. of current unique small firms 167 2,300 290 2,351 2,541 7,611
getting small business contracts
in industries for which SBA
considered decreasing size
standards (FPDS-NG FY2016-2018)
\1\..............................
Estimated number of small business 1 45 3 31 105 183
firms that would have lost small
business status in the decreases
that SBA considered..............
% decrease to small business firms 0.60 1.96 1.03 1.32 4.13 2.40
relative to current unique small
firms getting small business
contracts in industries for which
SBA considered decreasing size
standards (FPDS-NG FY2016-2018) \
1\...............................
Total small business contract $165.2 $1,190.7 $19.4 $343.5 $284.9 $2,003.8
dollars under current size
standards in industries for which
SBA considered decreasing size
standards ($ million) (FPDS-NG
FY2016-2018).....................
Estimated small business dollars $0.1 $52.8 $0.2 $2.6 $20.8 $76.4
not available to firms losing
small business status (Using avg
dollars obligated to SBs) ($
million)\ 1\ (FPDS-NG FY 2016-
2018)............................
% decrease to small business 0.04 4.43 1.02 0.75 7.30 3.81
dollars relative to total small
business contract dollars under
current size standards in
industries for which SBA
considered decreasing size
standards........................
Total no. of 7(a) and 504 loans to 428 2,604 593 4,835 1,899 10,359
small businesses in industries
for which SBA considered
decreasing size standards (FY2016-
2018)............................
Total amount of 7(a) and 504 loans $163.8 $1,317.2 $375.7 $4,119.1 $566.6 $6,542.3
to small businesses in industries
for which SBA considered
decreasing size standards ($
million) (FY2016-2018)...........
Estimated no. of 7(a) and 504 1 9 4 8 4 26
loans not available to firms that
would have lost small business
status...........................
Estimated 7(a) and 504 loan amount $0.4 $4.6 $6.8 $6.8 $1.2 $19.8
not available to firms that would
have lost small status ($
million).........................
% decrease to 7(a) and 504 loan 0.2% 0.3% 1.8% 0.2% 0.2% 0.3%
amount relative to the total
amount of 7(a) and 504 loans in
industries for which SBA
considered decreasing size
standards........................
Total no. of EIDL loans to small 19 142 64 171 133 529
businesses in industries for
which SBA considered decreasing
size standards (FY2016-2018).....
Total amount of EIDL loans to $1.1 $18.4 $10.3 $22.5 $8.9 $61.2
small businesses in industries
for which SBA considered
decreasing size standards ($
million) (FY2016-2018)...........
Estimated no. of EIDL loans not 1 1 1 1 1 5
available to firms that would
have lost small business status..
Estimated EIDL loan amount not $0.06 $0.13 $0.16 $0.13 $0.07 $0.55
available to firms that would
have lost small business status
($ million)......................
% decrease to EIDL loan amount 5.3% 0.7% 1.6% 0.6% 0.8% 0.9%
relative to the baseline.........
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
in number of firms.
\2\ Total impact represents total unique industries impacted to avoid double counting as some industries have
large firms gaining small business status and small firms extending small business status.
[[Page 76411]]
Transfer Impacts of Decreases to Size Standards
If the size standards were decreased under Alternative Option One,
it may result in a redistribution of Federal contracts between small
businesses losing the small business status and large businesses and
between small businesses losing the small business status and small
businesses remaining small under the reduced size standards. However,
as under the proposed increases to size standards, it would have no
impact on the overall economic activity since total Federal contract
dollars available for businesses to compete for will stay the same.
While SBA cannot estimate with certainty the actual outcome of the
gains and losses among different groups of businesses from contract
redistribution resulting from decreases to size standards, it can
identify several probable impacts. With a smaller pool of small
businesses under the decreases to size standards, some set-aside
Federal contracts to be otherwise awarded to small businesses may be
competed in unrestricted basis. As a result, large businesses may have
more Federal contracting opportunities. However, because agencies are
still required by law to award 23 percent of dollars to small
businesses, SBA expects the movement of set-aside contracts to
unrestricted competition to be limited. For the same reason, small
businesses remaining small under the reduced size standards are likely
to obtain more set aside contracts due to the reduced competition from
fewer businesses qualifying as small under the decreases to size
standards. With some larger small businesses losing small business
status under the decreases to size standards, smaller small businesses
would likely become more competitive in obtaining set aside contracts.
However, SBA cannot quantify these impacts.
Net Impact of Alternative Option One
To estimate the net impacts of Alternative Option One, SBA followed
the same methodology used to evaluate the impacts of the proposed size
standards (see Table 9 above). However, under Alternative Option One,
SBA used the calculated size standards instead of the proposed ones to
determine the impacts of changes to current thresholds. The impact of
the increases of the calculated size standards were already shown in
Table 9 above. Table 10 (above) and Table 11, Net Impacts of Size
Standards Changes under Alternative Option One, below, present the
impact of the decreases of size standards and the net impact of
adopting the calculated results under Alternative Option One,
respectively.
Based on the 2012 Economic Census, SBA estimates that in 132
industries in NAICS Sectors 61, 62, 71, 72 and 81 for which the
analytical results suggested to change size standards, about 2,990
firms (see Table 11, below), would become small under the Option One.
That represents about 0.2 percent of all firms classified as small
under the current size standards.
Based on the FPDS-NG data for fiscal years 2016-2018, SBA estimates
that about 38 active firms in Federal contracting in those industries
would gain small business status under Option One. This represents an
increase of about 0.2% of the total number of small businesses
participating in Federal contracting under the current size standards.
Based on the same data, SBA estimates that about $29.5 million of
Federal procurement dollars would not be available to firms losing
their small status. This represents a decrease of 0.7% from the
baseline for all industries covered by this proposed rule.
Based on the SBA's loan data for fiscal years 2016-2018, the total
number of 7(a) and 504 loans may experience an overall increase by
about 28 loans, and the loan amounts by about $3.2 million. This
represents a 0.02% increase in the loan amounts relative to the
baseline for all industries covered by this proposed rule.
Firms' participation under the SBA's EIDL program will be affected
as well. Since the benefit provided through this program is contingent
on the occurrence and severity of a disaster in the future, SBA cannot
make a meaningful estimate of this impact. However, based on the
historical trends of the EIDL data, SBA estimates that, on an annual
basis, the net impact of the Option One is 1 additional loan, and an
additional loan amount of about $0.16 million relative to the baseline
for all industries covered by this proposed rule. Table 11, below,
provides these results by NAICS sector.
Table 11--Net Impacts of Size Standards Changes Under Alternative Option One
----------------------------------------------------------------------------------------------------------------
Sector 61 Sector 62 Sector 71 Sector 72 Sector 81 Total
----------------------------------------------------------------------------------------------------------------
No. of industries with proposed 17 36 22 13 44 132
changes to size standards........
Total no. of small business under 80,620 607,466 87,630 486,936 557,798 1,820,450
the current size standards (2012
Economic Census).................
Additional firms qualifying as 687 636 6 200 1,460 2,990
small under proposed size
standards (2012 Economic Census).
% of additional firms qualifying 0.85 0.10 0.01 0.04 0.26 0.16
as small relative to total
current small businesses.........
No. of current unique small firms 3,514 5,566 672 3,069 5,672 18,184
getting small business contracts
(FPDS-NG FY2016-2018) \1\........
Additional small firms getting 32 -14 5 -30 50 38
small business status (FPDS-NG
FY2016-2018).....................
% increase to small firms relative 0.91 -0.25 0.74 -0.98 0.88 0.21
to current unique small firms
getting small business contracts
(FPDS-NG FY2016-2018) \1\........
Total small business small $1,257.0 $2,285.1 $46.1 $355.9 $517.9 $4,461.8
business contract dollars under
current size standards ($
million) (FPDS-NG FY2016-2018)...
Estimated small business dollars $19.3 -$38.0 $0.7 -$2.6 -$9.0 -$29.5
available to newly-qualified
small firms ($ million) (FPDS-NG
FY 2016-2018) \1\................
% increase to dollars relative to 1.54 -1.66 1.47 -0.72 -1.73 -0.66
total small business contract
dollars under current size
standards........................
Total no. of 7(a) and 504 loans to 993 6,251 2,280 9,313 6,233 25,070
small businesses (FY2016-2018)...
[[Page 76412]]
Total amount of 7(a) and 504 loans $371.8 $3,324.0 $1,104.6 $5,826.6 $2,301.6 $12,928.7
to small businesses (FY2016-2018)
Estimated no. of additional 7(a) 7 5 5 3 8 28
and 504 loans to newly-qualified
small firms......................
Estimated additional 7(a) and 504 $2.6 $3.4 -$2.9 -$2.6 $2.8 $3.2
loan amount to newly-qualified
small firms ($ million)..........
% increase to 7(a)and 504 loan 0.7% 0.1% -0.3% 0.0% 0.1% 0.02%
amount relative to the total
amount of 7(a) and 504 loans to
small businesses.................
Total no. of EIDL loans to small 68 376 140 382 646 1,612
businesses (FY2016-2018).........
Total amount of EIDL loans to $6.1 $41.7 $17.8 $48.7 $72.0 $186.4
small businesses (FY2016-2018)...
Estimated no. of additional EIDL 0 0 0 0 1 1
loans to newly-qualified small
firms............................
Estimated additional EIDL loan $0.04 -$0.03 -$0.04 -$0.01 $0.20 $0.16
amount to newly-qualified small
firms ($ million)................
% increase to EIDL loan amount 0.7% -0.1% -0.2% 0.0% 0.3% 0.1%
relative to the total amount of
EIDL loans to small businesses...
----------------------------------------------------------------------------------------------------------------
\1\ Additional dollars are calculated multiplying average small business dollars obligated per DUNS times change
in number of firms.
\2\ Total impact represents total unique industries impacted to avoid double counting as some industries have
large firms gaining small business status and small firms extending small business status.
Alternative Option Two: To Retain All Current Size Standards
Under this option, given the current COVID-19 pandemic, as
discussed elsewhere, SBA considered retaining the current levels of all
size standards even though the analytical results may suggest changing
them. SBA considers that the option of retaining all size standards at
this moment provides the opportunity to reassess the economic situation
once the economic recovery starts. Under this option, as the current
situation develops, SBA will be able to assess new data available on
economic indicators, federal procurement, and SBA loans as well. SBA
estimates a net impact of zero for this option, when compared to the
baseline. However, if we compare the proposal of increasing 70 size
standards and retaining 75 with this alternative approach, the benefits
for small businesses of adopting the proposal will not be attained,
because of which SBA is not proposing the Alternative Option Two.
Executive Order 13771
SBA has determined, subject to the approval of the Office of
Information and Regulatory Affairs (OIRA) of the Office of Management
and Budget (OMB), that this proposed rule is not subject to the
requirements of Executive Order 13771, because most of the rule's
impacts are income transfers between small and other than small
businesses. According to the Executive Order 13771 guidance in OMB M-
17-21, dated April 5, 2017 (E.O. 13771 Guidance), ``transfers'' are not
covered by Executive Order 13771. The E.O. 13771 Guidance also states
that ``in some cases, [transfer rules] may impose requirements apart
from transfers, or transfers may distort markets causing
inefficiencies. In those cases, the actions would need to be offset to
the extent they impose more than de minimis costs.'' SBA estimates that
this rulemaking would impose only de minimis costs on small businesses
and would result in negligible compliance costs. Thus, SBA has
determined that this rulemaking is exempt from the requirements of
Executive Order 13771. Details on the estimated costs of this proposed
rule can be found in the Regulatory Impact Analysis above.
Regulatory Flexibility Act
According to the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-
612, when an agency issues a rulemaking, it must prepare a regulatory
flexibility analysis to address the impact of the rule on small
entities.
This proposed rule, if adopted, may have a significant impact on a
substantial number of small businesses in the industries covered by
this proposed rule. As described above, this rule may affect small
businesses seeking Federal contracts, loans under SBA's 7(a), 504 and
Economic Injury Disaster Loan Programs, and assistance under other
Federal small business programs.
Initial Regulatory Flexibility Analysis
Immediately below, SBA sets forth an initial regulatory flexibility
analysis (IRFA) of this proposed rule addressing the following
questions: (1) What are the need for and objective of the rule?; (2)
What are SBA's description and estimate of the number of small
businesses to which the rule will apply?; (3) What are the projected
reporting, record keeping, and other compliance requirements of the
rule?; (4) What are the relevant Federal rules that may duplicate,
overlap, or conflict with the rule?; and (5) What alternatives will
allow the Agency to accomplish its regulatory objectives while
minimizing the impact on small businesses?
1. What are the need for and objective of the rule?
Changes in industry structure, technological changes, productivity
growth, mergers and acquisitions, and updated industry definitions have
changed the structure of many the industries covered by this proposed
rule. Such changes can be enough to support revisions to current size
standards for some industries. Based on the analysis of the latest data
available, SBA believes that the revised standards in this proposed
rule more appropriately reflect the size of businesses that need
Federal assistance. The 2010 Jobs Act also requires SBA to review all
size standards and make necessary adjustments to reflect market
conditions.
2. What are SBA's description and estimate of the number of small
businesses to which the rule will apply?
Based on data from the 2012 Economic Census, SBA estimates that
there are about 1.1 million small firms covered by this rulemaking
under industries with proposed changes to size standards. If the
proposed rule is adopted in its present form, SBA
[[Page 76413]]
estimates that an additional 4,708 businesses will become small.
3.What are the projected reporting, record keeping and other compliance
requirements of the rule?
The proposed size standard changes impose no additional reporting
or record keeping requirements on small businesses. However, qualifying
for Federal procurement and a number of other programs requires that
businesses register in SAM and self-certify that they are small in that
system frequently enough to ensure that their SAM registration is
current, accurate, and complete with the submission of an offer for
every new contract (FAR 52.204-7 and 52.204-8). For existing contracts,
small business contractors are generally required to update their SAM
registration at least annually (FAR 52.204-13). Therefore, businesses
opting to participate in those programs must comply with SAM
requirements. There are no costs associated with SAM registration or
certification. Changing size standards alters the access to SBA's
programs that assist small businesses but does not impose a regulatory
burden because they neither regulate nor control business behavior.
4. What are the relevant Federal rules, which may duplicate, overlap or
conflict with the rule?
Under section 3(a)(2)(C) of the Small Business Act, 15 U.S.C.
632(a)(2)(c), Federal agencies must use SBA's size standards to define
a small business, unless specifically authorized by statute to do
otherwise. In 1995, SBA published in the Federal Register a list of
statutory and regulatory size standards that identified the application
of SBA's size standards as well as other size standards used by Federal
agencies (60 FR 57988 (November 24, 1995)). SBA is not aware of any
Federal rule that would duplicate or conflict with establishing size
standards.
However, the Small Business Act and SBA's regulations allow Federal
agencies to develop different size standards if they believe that SBA's
size standards are not appropriate for their programs, with the
approval of SBA's Administrator (13 CFR 121.903). The Regulatory
Flexibility Act authorizes an Agency to establish an alternative small
business definition, after consultation with the Office of Advocacy of
the U.S. Small Business Administration (5 U.S.C. 601(3)).
5. What alternatives will allow the Agency to accomplish its regulatory
objectives while minimizing the impact on small entities?
By law, SBA is required to develop numerical size standards for
establishing eligibility for Federal small business assistance
programs. Other than varying size standards by industry and changing
the size measures, no practical alternative exists to the systems of
numerical size standards.
However, SBA considered two alternatives to its proposal to
increase 70 size standards and maintain 75 size standards at their
current levels. The first alternative SBA considered was adopting size
standards based solely on the analytical results. In other words, the
size standards of 70 industries for which the analytical results
suggest raising size standards would be raised. However, the size
standards of 63 industries for which the analytical results suggest
lowering size standards would be lowered. This would cause a
significant number of small businesses to lose their small business
status. Under the second alternative, in view of the COVID-19 pandemic,
SBA considered retaining all size standards at the current levels, even
though the analytical results may suggest increasing 70 and decreasing
63 size standards. Retaining all size standards at their current levels
would be more onerous for the small businesses than the option of
adopting 70 increases and retaining the rest of size standards.
Executive Order 13563
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, reducing costs, harmonizing rules, and promoting
flexibility. A description of the need for this regulatory action and
benefits and costs associated with this action including possible
distributional impacts that relate to Executive Order 13563 is included
above in the Regulatory Impact Analysis under Executive Order 12866.
Additionally, Executive Order 13563, section 6, calls for retrospective
analyses of existing rules.
The review of size standards in the industries covered by this
proposed rule is consistent with section 6 of Executive Order 13563 and
the 2010 Jobs Act which requires SBA to review all size standards and
make necessary adjustments to reflect market conditions. Specifically,
the 2010 Jobs Act requires SBA to review at least one-third of all size
standards during every 18-month period from the date of its enactment
(September 27, 2010) and to review all size standards not less
frequently than once every 5 years, thereafter. SBA had already
launched a comprehensive review of size standards in 2007. In
accordance with the Jobs Act, SBA completed the comprehensive review of
the small business size standard for each industry, except those for
agricultural enterprises previously set by Congress, and made
appropriate adjustments to size standards for a number of industries to
reflect current Federal and industry market conditions. The first
comprehensive review was completed in 2015. Prior to 2007, the last
time SBA conducted a comprehensive review of all size standards was
during the late 1970s and early 1980s.
SBA issued a White Paper entitled ``Size Standards Methodology''
and published a notice in the April 11, 2019, edition of the Federal
Register (84 FR 14587) to advise the public that the document is
available for public review and comments. The ``Size Standards
Methodology'' White Paper explains how SBA establishes, reviews, and
modifies its receipts-based and employee-based small business size
standards. SBA gave appropriate consideration to all input,
suggestions, recommendations, and relevant information obtained from
industry groups, individual businesses, and Federal agencies in
developing size standards for those industries covered by this proposed
rule.
Executive Order 12988
This action meets applicable standards set forth in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order 13132, SBA has determined that this
proposed rule will not have substantial, direct effects on the States,
on the relationship between the National Government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Therefore, SBA has determined that this proposed
rule has no federalism implications warranting preparation of a
federalism assessment.
Paperwork Reduction Act
For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35,
SBA has determined that this rule will not impose any new reporting or
record keeping requirements.
[[Page 76414]]
List of Subjects in 13 CFR Part 121
Administrative practice and procedure, Government procurement,
Government property, Grant programs--business, Individuals with
disabilities, Loan programs--business, Reporting and recordkeeping
requirements, Small businesses.
For the reasons set forth in the preamble, SBA proposes to amend 13
CFR part 121 as follows:
PART 121--SMALL BUSINESS SIZE REGULATIONS
0
1. The authority citation for part 121 continues to read as follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(a)(36), 662, and
694a(9); Pub. L. 116-136, Section 1114.
0
2. In Sec. 121.201, amend the table ``Small Business Size Standards by
NAICS Industry'' by revising entries ``611110'', ``611210'',
``611310'', ``611410'', ``611420'', ``611430'', ``611511'', ``611513'',
``611519'', ``611630'', ``611691'', ``611692'', ``611699'', ``611710'',
``621111'', ``621340'', ``621399'', ``621410'', ``621491'', ``621498'',
``621511'', ``621910'', ``621999'', ``623312'', ``623990'', ``624110'',
``624120'', ``624190'', ``624210'', ``624230'', ``624310'', ``624410'',
``711120'', ``711130'', ``711219'', ``711320'', ``711410'', ``712120'',
``712190'', ``713920'', ``713930'', ``713940'', ``713950'', ``721211'',
``721310'', ``722511'', ``722515'', ``811122'', ``811191'', ``811198'',
``811211'', ``811213'', ``811310'', ``812111'', ``812112'', ``812191'',
``812210'', ``812310'', ``812320'', ``812921'', ``812990'', ``813110'',
``813312'', ``813319'', ``813410'', ``813910'', ``813920'', ``813930'',
``813940'', and ``813990'' to read as follows:
Sec. 121.201 What size standards has SBA identified by North
American Industry Classification System codes?
* * * * *
Small Business Size Standards by NAICS Industry
----------------------------------------------------------------------------------------------------------------
Size Size
standards in standards in
NAICS codes NAICS U.S. industry title millions of number of
dollars employees
----------------------------------------------------------------------------------------------------------------
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 61--Educational Services
Subsector 611--Educational Services
----------------------------------------------------------------------------------------------------------------
611110............................ Elementary and Secondary Schools............ $17.5 ..............
611210............................ Junior Colleges............................. 28.5 ..............
611310............................ Colleges, Universities and Professional 30.5 ..............
Schools.
611410............................ Business and Secretarial Schools............ 18.0 ..............
611420............................ Computer Training........................... 14.0 ..............
611430............................ Professional and Management Development 13.0 ..............
Training.
611511............................ Cosmetology and Barber Schools.............. 11.5 ..............
* * * * * * *
611513............................ Apprenticeship Training..................... 10.0 ..............
611519............................ Other Technical and Trade Schools........... 18.5 ..............
Except............................ Job Corps Centers\16\....................... \16\ 41.5 ..............
* * * * * * *
611630............................ Language Schools............................ 18.0 ..............
611691............................ Exam Preparation and Tutoring............... 11.0 ..............
611692............................ Automobile Driving Schools.................. 9.0 ..............
611699............................ All Other Miscellaneous Schools and 14.5 ..............
Instruction.
611710............................ Educational Support Services................ $21.0 ..............
----------------------------------------------------------------------------------------------------------------
Sector 62--Health Care and Social Assistance
Subsector 621--Ambulatory Health Care Services
----------------------------------------------------------------------------------------------------------------
621111............................ Offices of Physicians (except Mental Health 14.0 ..............
Specialists).
* * * * * * *
621340............................ Offices of Physical, Occupational and Speech 11.0 ..............
Therapists and Audiologists.
* * * * * * *
621399............................ Offices of All Other Miscellaneous Health 9.0 ..............
Practitioners.
621410............................ Family Planning Centers..................... 16.5 ..............
* * * * * * *
621491............................ HMO Medical Centers......................... 39.0 ..............
* * * * * * *
621498............................ All Other Outpatient Care Centers........... 22.5 ..............
621511............................ Medical Laboratories........................ $36.5 ..............
* * * * * * *
621910............................ Ambulance Services.......................... 20.0 ..............
[[Page 76415]]
* * * * * * *
621999............................ All Other Miscellaneous Ambulatory Health 18.0 ..............
Care Services.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 623--Nursing and Residential Care Facilities
----------------------------------------------------------------------------------------------------------------
* * * * * * *
623312............................ Assisted Living Facilities for the Elderly.. 20.5 ..............
623990............................ Other Residential Care Facilities........... 14.0 ..............
----------------------------------------------------------------------------------------------------------------
Subsector 624--Social Assistance
----------------------------------------------------------------------------------------------------------------
624110............................ Child and Youth Services.................... 13.5 ..............
624120............................ Services for the Elderly and Persons with 13.0 ..............
Disabilities.
624190............................ Other Individual and Family Services........ 14.0 ..............
624210............................ Community Food Services..................... 17.0 ..............
* * * * * * *
624230............................ Emergency and Other Relief Services......... 36.5 ..............
624310............................ Vocational Rehabilitation Services.......... 13.0 ..............
624410............................ Child Day Care Services..................... 8.5 ..............
----------------------------------------------------------------------------------------------------------------
Sector 71--Arts, Entertainment and Recreation
Subsector 711--Performing Arts, Spectator Sports and Related Industries
----------------------------------------------------------------------------------------------------------------
* * * * * * *
711120............................ Dance Companies............................. 16.0 ..............
711130............................ Musical Groups and Artists.................. 13.0 ..............
* * * * * * *
711219............................ Other Spectator Sports...................... 14.5 ..............
* * * * * * *
711320............................ Promoters of Performing Arts, Sports and 19.5 ..............
Similar Events without Facilities.
711410............................ Agents and Managers for Artists, Athletes, $15.5 ..............
Entertainers and Other Public Figures.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 712--Museums, Historical Sites and Similar Institutions
----------------------------------------------------------------------------------------------------------------
* * * * * * *
712120............................ Historical Sites............................ 11.5 ..............
* * * * * * *
712190............................ Nature Parks and Other Similar Institutions. 17.0 ..............
----------------------------------------------------------------------------------------------------------------
Subsector 713--Amusement, Gambling and Recreation Industries
----------------------------------------------------------------------------------------------------------------
* * * * * * *
713920............................ Skiing Facilities........................... 31.0 ..............
713930............................ Marinas..................................... 9.5 ..............
713940............................ Fitness and Recreational Sports Centers..... 15.5 ..............
713950............................ Bowling Centers............................. 11.0 ..............
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Sector 72--Accommodation and Food Services
Subsector 721--Accommodation
----------------------------------------------------------------------------------------------------------------
* * * * * * *
721211............................ RV (Recreational Vehicle) Parks and 9.0 ..............
Campgrounds.
[[Page 76416]]
* * * * * * *
721310............................ Rooming and Boarding Houses, Dormitories, 12.5 ..............
and Workers' Camps.
----------------------------------------------------------------------------------------------------------------
Subsector 722--Food Services and Drinking Places
----------------------------------------------------------------------------------------------------------------
* * * * * * *
722511............................ Full-Service Restaurants.................... 10.0 ..............
* * * * * * *
722515............................ Snack and Nonalcoholic Beverage Bars........ 20.0 ..............
----------------------------------------------------------------------------------------------------------------
Sector 81--Other Services
Subsector 811--Repair and Maintenance
----------------------------------------------------------------------------------------------------------------
* * * * * * *
811122............................ Automotive Glass Replacement Shops.......... 15.5 ..............
811191............................ Automotive Oil Change and Lubrication Shops. 9.5 ..............
* * * * * * *
811198............................ All Other Automotive Repair and Maintenance. 9.0 ..............
811211............................ Consumer Electronics Repair and Maintenance. 22.5 ..............
* * * * * * *
811213............................ Communication Equipment Repair and 19.5 ..............
Maintenance.
* * * * * * *
811310............................ Commercial and Industrial Machinery and 11.0 ..............
Equipment (except Automotive and
Electronic) Repair and Maintenance.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Subsector 812--Personal and Laundry Services
----------------------------------------------------------------------------------------------------------------
812111............................ Barber Shops................................ 8.5 ..............
812112............................ Beauty Salons............................... 8.5 ..............
* * * * * * *
812191............................ Diet and Weight Reducing Centers............ 24.0 ..............
* * * * * * *
812210............................ Funeral Homes and Funeral Services.......... 11.0 ..............
* * * * * * *
812310............................ Coin[dash]Operated Laundries and Drycleaners 11.5 ..............
812320............................ Dry cleaning and Laundry Services (except 7.0 ..............
Coin[dash]Operated).
* * * * * * *
812921............................ Photofinishing Laboratories (except 26.0 ..............
One[dash]Hour).
* * * * * * *
812990............................ All Other Personal Services................. 13.0 ..............
----------------------------------------------------------------------------------------------------------------
Subsector 813--Religious, Grantmaking, Civic, Professional and Similar Organizations
----------------------------------------------------------------------------------------------------------------
813110............................ Religious Organizations..................... 11.5 ..............
* * * * * * *
813312............................ Environment, Conservation and Wildlife 17.0 ..............
Organizations.
813319............................ Other Social Advocacy Organizations......... 16.0 ..............
813410............................ Civic and Social Organizations.............. 8.5 ..............
813910............................ Business Associations....................... 13.5 ..............
813920............................ Professional Organizations.................. 20.5 ..............
813930............................ Labor Unions and Similar Labor Organizations 14.5 ..............
813940............................ Political Organizations..................... 12.5 ..............
813990............................ Other Similar Organizations (except 12.0 ..............
Business, Professional, Labor, and
Political Organizations).
[[Page 76417]]
* * * * * * *
----------------------------------------------------------------------------------------------------------------
Footnotes
16. NAICS code 611519--Job Corps Centers. For classifying a Federal procurement, the purpose of the solicitation
must be for the management and operation of a U.S. Department of Labor Job Corps Center. The activities
involved include admissions activities, life skills training, educational activities, comprehensive career
preparation activities, career development activities, career transition activities, as well as the management
and support functions and services needed to operate and maintain the facility. For SBA assistance as a small
business concern, other than for Federal Government procurements, a concern must be primarily engaged in
providing the services to operate and maintain Federal Job Corps Centers.
* * * * *
Jovita Carranza,
Administrator.
[FR Doc. 2020-26312 Filed 11-25-20; 8:45 am]
BILLING CODE 8026-03-P